Pinduoduo Inc (NASDAQ:PDD) saw its shares surge after third quarter results topped Street expectations as Covid-related lockdowns forced consumers to shop online.
Shares soared more than 13% as the Chinese ecommerce platform reported a 65% jump in revenue to 35.50 billion yuan in the quarter ended September 30, beating estimates of 30.94 billion yuan.
Intermittent lockdowns and a recovery in consumer spending helped the Nasdaq-listed group which posted a 388% increase in operating profit to nearly 10.44 billion yuan, while net income attributable to shareholders was 10.59 billion yuan, up 546%.
READ: Pinduoduo stock drops as Chinese e-commerce group misses revenue expectations
Agricultural produce, consumer electronics and beauty products were among the categories that performed well, Pinduoduo chairman and chief executive Chen Lei told analysts on a call following the earnings announcement.
"If you look at the industry, we see the competition remains intense and we need to invest patiently in the supply side and step up our investments in technology and innovation to improve the overall supply chain efficiency," Chen said.
Liu Jun, vice president of finance at Pinduoduo, said further investment would weigh on future profitability.
“We plan to increase our investments to further drive innovations on our platform.”
As such, we think it’s unlikely that the profit level of the past quarter can be maintained,” she said.
Contact Jeremy at jeremy@proactiveinvestors.com