Pinduoduo Inc (NASDAQ: PDD) is the biggest interactive and agriculture commerce platform in China and went down 20% after it announced its unaudited third-quarter financial results for 2021.
What did top management say?
Pinduoduo’s Chief Executive Officer and Chairman, Mr. Lei Chen, claims that they’re putting a lot more focus on investments in research and development and are moving away from the previous emphasis they had in the first five years on sales and marketing. Mr. Chen said:
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We want to leverage our strength in technology to deepen our digital inclusion efforts in agriculture, and will allocate all profits from the third quarter to the ’10 Billion Agriculture Initiative.
The CEO added that they’re witnessing the younger generation mature rapidly and are looking to place more young leaders in critical roles in the company.
Vice President of Finance, Mr. Tony Ma, said that the company’s total revenues, without merchandise sales contribution, increased by about 55% year-over-year in the third quarter of 2021.
Mr. Ma claimed that they are going to lay a strong foundation for sustainable growth by expanding the investment in research development as well as patiently investing in the agricultural tech segments.
Unaudited financial results
The company recorded total revenues of about $3.337 million, representing an increase of 51% from the same quarter in the previous financial year. This increase they witnessed was mainly because of the growth in the company’s online marketing services.
Online marketing services revenue came to about $2.785 million, representing a 44% increase from the same quarter of the previous fiscal year. On the other hand, transaction services revenue came to around $539 million, representing a 161% increase from the same quarter of the previous fiscal year.
Total operating expenses for the third quarter of 2021 came to about $1.987 million, while the sales and marketing expenses the company reported for this quarter were around $1.559 million, which was a slight dip from what they recorded in the same quarter of the previous fiscal year.
The company made a sizeable operating profit of $332 million and a Non-GAAP operating profit of about $506 million in the third quarter of 2021.
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