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Temu Parent PDD Holdings Jumps As Q1 Earnings Blow Past Expectations

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Aaron McDade
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Published May 22, 2024
In this photo illustration the logo of app Temu, an online marketplace from the Chinese company PDD Holdings can be seen on a smartphone next to a finger on March 27, 2024 in Berlin, Germany In this photo illustration the logo of app Temu, an online marketplace from the Chinese company PDD Holdings can be seen on a smartphone next to a finger on March 27, 2024 in Berlin, Germany

Thomas Trutschel / Photothek via Getty Images

Key Takeaways

  • American depositary receipts (ADRs) of Temu parent company PDD Holdings rose Wednesday as the company reported quarterly results substantially above expectations.
  • Revenue once again doubled year-over-year, while net income more than tripled.
  • Temu has driven the revenue growth in the U.S. since its September 2022 launch, gaining market share and attention of American consumers.

Chinese e-commerce company PDD Holdings (PDD), which owns the discount marketplace Temu, saw its American depositary receipts (ADRs) surge after the opening bell Wednesday following a first-quarter earnings report that blew past expectations.

Like last quarter, PDD more than doubled its revenue year-over-year, reporting revenue of 86.81 billion Chinese yuan ($12.02 billion) compared with CNY37.64 billion last year, well above the CNY76.38 billion analysts had expected, according to estimates compiled by Visible Alpha.

PDD more than tripled its profits year-over-year, recording CNY28 billion for the quarter from CNY8.1 billion a year ago, and more than doubled analyst estimates of CNY13.02 billion. The company reported diluted earnings per share (EPS) of CNY4.74, while analysts had projected CNY2.25.

Temu Continues To Grow, But Not Without Scrutiny

Temu has grown substantially since launching in the U.S. in September 2022, helping PDD repeatedly beat expectations in its earnings reports over the last year. The company also made headlines earlier this year, when it bought multiple slots of commercial space during the Super Bowl, which has also led to increased scrutiny of Temu's business model.

Allegations have been made against Temu and Chinese fast-fashion rival Shein that their businesses benefit from forced labor, including in a June 2023 House committee report, as they each depend on thousands of different suppliers. Both companies have denied the allegations.

Jefferies analysts in March upgraded their rating of PDD to "buy" from "hold," saying they believed "that concerns on geopolitical risks are priced in, and Temu's market share gain story in domestic and overseas markets is intact."

ADRs of the company rose 5.4% to $153.31 as of 9:52 a.m. ET Wednesday, and have more than doubled over the last 12 months.

Article Sources
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  1. PDD Holdings. "PDD Holdings Announces First Quarter 2024 Unaudited Financial Results."

  2. House Select Committee on the Chinese Communist Party. "Select Committee Releases Interim Findings from Shein & Temu Forced Labor Investigation."

  3. The Wall Street Journal. "The China-Backed Retailers Shipping Millions of U.S. Packages a Day."

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