:max_bytes(150000):strip_icc()/GettyImages-2231786703-787c9840e92f4f74a11bbaffb0ad6afc.jpg "Temu Parent PDD’s Results Beat Estimates Despite Tariff Exemption Loss")
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KEY TAKEAWAYS
- PDD Holdings Monday posted second-quarter results that overshot analysts’ estimates even as the parent of the Temu shopping site was hit during the period by the end of a key U.S. tariff exemption.
- A trade loophole known as the de minimis exemption that allowed foreign firms to avoid tariffs on shipments worth less than $800 expired in early May.
- Finance Vice President Jun Liu said, however, that intense competition weighed on second-quarter revenue growth.
PDD Holdings (PDD) Monday posted second-quarter results that overshot analysts’ estimates even as the parent of the Temu shopping site faced the end of a key U.S. tariff exemption.
The Chinese company posted second-quarter adjusted earnings per ADS of 22.07 Chinese yuan ($3.08) on revenue of CNY103.98 billion ($14.51 billion), a 7% rise year-over-year. Analysts polled by Visible Alpha projected CNY14.94 ($2.08) and CNY103.22 billion ($14.4 billion), respectively.
A trade loophole known as the de minimis exemption that allowed foreign firms to avoid tariffs on shipments worth less than $800 expired in early May, putting pressure on Chinese bargain sites like Temu and Shein.
According to Bloomberg, a stimulus boost by Beijing increasing subsidies for consumer goods like phones and appliances helped PDD’s results. However, the company’s second-quarter revenue gain was lower than the 10% jump it posted in the first quarter.
“Revenues growth further moderated this quarter amid intense competition,” PDD Finance Vice President Jun Liu said in the statement. “As we remain focused on long-term value creation, the sustained investments may continue to weigh on short-term profitability.
PDD shares, which entered Monday up 35% this year, are rising 1% in premarket trading.
