The following is a summary of the PDD Holdings Inc. (PDD) Q2 2024 Earnings Call Transcript:

Financial Performance:

• PDD Holdings reported Q2 2024 revenue of RMB 97.1 billion, representing an 86% year-on-year increase.

• The rapid revenue growth was primarily driven by increases in online marketing services and transaction services.

• Net income attributable to ordinary shareholders rose to RMB 32 billion, up from RMB 13.1 billion in Q2 2023, with non-GAAP net income reaching RMB 34.4 billion.

• Despite significant revenue growth, the company anticipates a downward trend in profitability due to increased investments in the platform's ecosystem and potential fluctuations from competition and market uncertainties.

Business Progress:

• PDD Holdings is investing heavily in its digital platform to strengthen supply chain efficiencies and improve consumer experiences.

• The company has advanced its agricultural strategy by launching initiatives in major production regions and establishing partnerships to enhance local agriculture brands.

• Investments include substantial support for high-quality merchants with a commitment to reducing their transaction fees by RMB 10 billion in the first year to encourage ecosystem quality growth.

Opportunities:

• PDD Holdings is leveraging escalating digital technology and collaboration with high-quality brands to adapt to changing consumer preferences, favoring experience-based consumption over material purchases.

• The company is enhancing its global presence, despite facing increased competition and external uncertainties, indicating a strategy to expand its market reach.

Risks:

• The company faces intense competition in the e-commerce sector, which is acknowledged as a persistent and intensifying challenge.

• External factors such as global uncertainties and non-business factors are increasingly affecting operations, leading to fluctuating business conditions and an inevitable decrease in profitability over time.

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