What Should Investors Know Ahead of PDD's Upcoming Earnings?
$PDD Holdings (PDD.US)$ is expected to report its Q2 earnings on August 26th, 2024 before market open. Since the market sell-off in early August, shares of the company has surged by more than 15%.
Consensus Estimates
● The company is predicted to post an EPS of 19.01 CNY, indicating a 111.27% growth compared to the equivalent quarter last year.
● Revenues are expected to be 100.10 billion CNY, indicating a 91.46% upward movement from the same quarter last year.
PDD Holdings Financial Overview
A few months ago, PDD Holdings published strong Q1 quarterly results. Its total revenue rose by 131% to 86.81 billion CNY while its operating profit rose to over 25.97 billion CNY and the net income soared to 27.99 billion CNY.
PDD Holdings also has one of the best balance sheets in China. In its most recent results, the company said that its cash and cash equivalents rose to over 55.5 billion CNY while its short-term investments jumped to over 186 billion CNY.
PDD also has over 59.1 billion CNY in restricted cash and 4.7 billion CNY in receivables. Altogether, its total current assets stand at over 316 billion CNY, which is a very good amount for a company that is still growing its operations.
PDD's revenue surges due to online marketing services and transaction services
PDD's 2Q revenue boost from Temu's new partial-consignment services in nine countries from March, which helped attract more selling merchants and shoppers with speedier deliveries beyond China, likely lifted the firm's total receipts to consensus estimates of a 91% year-over-year increase according to Bloomberg.
According to Bloomberg analysts, this would have surpassed the revenue growth of $Alibaba (BABA.US)$'s comparable international digital commerce (AIDC), Cainiao and Taobao-Tmall units, undermining the effectiveness of Alibaba's enlarged marketing spend to snatch market share from PDD. Meanwhile, this also surpasses the revenue growth of e-commerce giant $JD.com (JD.US)$'s JD Retail and JD Logistics units.
Besides, PDD's new revenue contribution from more profitable partial consignment services likely lifted 2Q adjusted operating margin for the second straight quarter. As more merchants lean on Temu to sell globally, revenue contribution from transaction services could hit new highs in 2024.
Hedge funds increased their holdings in PDD in Q2
In the second quarter, Baillie Gifford increased its stakes in PDD Holdings by approximately 348,130 shares. Meanwhile, according to the disclosure of 13F filings, the global alternative asset management giant $The Carlyle Group (CG.US)$ holds about 0.36 million shares of PDD, with a market value of about $48.13 million, accounting for 3.61% of the investment portfolio, a sharp increase of 195.24% from the previous quarter.
Source: Bloomberg, Yahoo Finance
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