The core reason for the sharp drop in Pinduoduo's stock price is that its revenue growth rate is lower than expected. In Q2 2024, Pinduoduo's revenue was 97.06 billion yuan (RMB), a year-on-year increase of 85.7%. However, according to market expectations, Pinduoduo's revenue in that quarter should reach 100 billion yuan, a year-on-year increase of 91%.
In fact, Pinduoduo's revenue growth rate of 85.7% is already country code philippines mobile far ahead of its domestic e-commerce peers. However, the management's statement further affected investor confidence.
In the conference call after the Q2 earnings report, clear-cut opinions, including: the continued slowdown in future revenue growth is inevitable; the company will sacrifice short-term profits and make long-term investments to cope with increasingly fierce industry competition; the company will not repurchase or distribute dividends in the next few years.
In fact, Pinduoduo's management has clearly lowered market expectations more than once. For example, after the revenue and new users in Q3 2021 were both lower than expected, and the revenue and profit in Q1 2022 were both higher than expected, the then CEO Chen Lei clearly reminded in a conference call that with Pinduoduo's size, slowing growth is inevitable in the long run.
For a long time, Pinduoduo has been synonymous with "vigorous"; the capital market has become accustomed to allowing it to maintain high growth, although no one can achieve high growth forever.