From Yahoo Finance.: 2025-03-20 20:14:00

PDD Holdings Inc. shares rose 4% after reporting an 18% earnings increase, but revenue fell short at 110.6 billion yuan for the December quarter. The company faces challenges from US tariffs and domestic competition, causing uncertainty in the market.

Executives acknowledged global uncertainty and intense competition affecting short-term growth. Rivals JD.com Inc. and Alibaba Group Holding Ltd. reported better sales for the December quarter. The Chinese government aims to boost domestic demand to offset US tariffs and achieve a growth target of around 5%.

Washington threatens to close a tax-free loophole benefiting Chinese retailers like Temu and Shein, potentially forcing them to subsidize merchants due to increased shipping expenses. PDD and Shein are diversifying logistics to mitigate these challenges.

PDD’s 4Q adjusted operating-profit miss reflects growing financial risks from global business. With disruptions from US tariff hikes, PDD may struggle to maintain operating profits if revenue growth remains below 25%.

Temu is adapting to potential changes by shipping inventory in bulk to the US and paying tariffs to store in warehouses. This helps reduce delivery times but still impacts their discount model.

The European Union is investigating Temu for potentially selling illegal products, while Vietnam suspended the platform for missing a re-registration deadline. These developments add more scrutiny to the company’s operations.



Read more at Yahoo Finance.: PDD’s Shares Climb After Earnings Beat Soothes Worst Trade Fears