Pinduoduo’s stock rockets toward a record after surprise adjusted profit and revenue beat

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Shares of Pinduoduo Inc. rocketed 24% into record territory in active premarket trading Thursday, after the Shanghai-based e-commerce platform company reported surprise adjusted profit and revenue that nearly doubled to beat forecasts, as more active buyers spent more money. Net losses narrowed to RMB784.7 million ($115.6 million), or RMB0.66 per American depositary share (ADS), from RMB2.34 billion, or RMB2.00 per ADS, in the year-ago period. Excluding non-recurring items, the company recorded an adjusted profit of RMB0.33 per ADS, beating the FactSet consensus for a per-ADS loss of RMB1.14. Revenue rose 89% to RMB14.21 billion ($2.09 billon), above the FactSet consensus of RMB12.22 billion. Gross merchandise value (GMV) increased 73% to RMB1.46 trillion ($214.7 billion). Average monthly active users in the quarter rose 50% to 643.4 million, active buyers in the 12 months ended Sept. 30 grew 36% to 731.3 million and annual spend per active buyer for the 12-month period rose 27% to RMB1,993.10 ($293.6). The stock, which is on track to open well above the Nov. 6 record closing price of $114.53, has nearly tripled (up 194.7%) year to date, while the iShares MSCI China ETF has rallied 24.3% and the S&P 500 has gained 10.6%.
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