【PDD Earnings】Pinduoduo Rises 9% as "New Pinomics" Plan Commits Billions of Yuan Over 3 Years to Invest Heavily in China's Supply Chain; Q4 Profit Misses Expectations

Pinduoduo (US: PDD) announced that last year’s fourth-quarter revenue was 123.91 billion yuan (RMB), up 12% year-over-year, slightly exceeding market expectations of 123.72 billion yuan. Net profit was 24.54 billion yuan, down 11% year-over-year. Adjusted net profit was 26.295 billion yuan, down 12%, below market expectations of 31.16 billion yuan.

Pinduoduo’s US stock price fell about 2% before the market opened, then surged 9%. As of 10:15 PM Hong Kong time on Wednesday (25th), Pinduoduo’s US stock rose 8.2%.

PDD Launches “New Pimm” Program with 15 Billion RMB Investment

At the December shareholder meeting, Pinduoduo announced its next-phase strategy: “Focus, Reinvest in Supply Chain Upgrades, High-Quality Development,” aiming to “Rebuild Pinduoduo in Three Years.” The company also revealed the “New Pimm” plan, which involves investing 100 billion yuan over three years to heavily invest in China’s supply chain and develop proprietary brands. This marks a new billion-level investment following last year’s “Hundred Billion Support” initiative, furthering its merchant benefit strategy.

According to reports, “New Pimm” has established a new dedicated company in Shanghai, with an initial cash injection of 15 billion yuan. Over the next three years, a total of 100 billion yuan will be invested to integrate supply chain resources from “Pinduoduo + Temu,” build proprietary brands, and target global markets. The plan includes systematically developing and incubating brands for different markets and categories, aiming to export high standards of Chinese manufacturing and promote China’s manufacturing to higher-value segments.

PDD: E-commerce Platforms Must Create More Value for the Entire Supply Chain

Zhao Jiazhen, Co-Chairman and Co-CEO of Pinduoduo, stated during an analyst meeting that the e-commerce industry has entered a phase of intensified competition and slowed growth over the past several quarters. The company proposes “Reinforcing the Supply Chain,” recognizing that e-commerce platforms “should not be just simple transaction platforms but should do more to create greater value for all participants in the supply chain.”

Zhao explained that “Reinforcing the Supply Chain” covers multiple aspects, focusing on two key initiatives. First, free delivery to villages, a pilot project launched in Q4 last year, aims to reduce logistics costs in remote administrative villages and encourage merchants to ship there. The company hopes to include more remote rural areas in free shipping zones. Currently, Pinduoduo has built county-level transfer warehouses and village collection points across many regions, with the platform covering the second-stage transfer costs for village delivery orders.

Second, a new quality supply platform targets high-quality merchants willing to improve product quality and service. Using industry insights and supply chain collaboration, it helps merchants upgrade throughout their product development, manufacturing, and sales lifecycle, reshaping the supply chain system. Zhao noted that there are many opportunities in this area, such as product R&D. Traditionally, new product development involves luck, but within the current platform ecosystem, key product information is consolidated by the merchant recruitment team and promptly shared with merchants. With traffic support, new products can be tested efficiently, helping merchants iterate their offerings more effectively.

Pinduoduo Reiterates That Policy Uncertainty Will Short-Termly Pressure Profitability

Lai Chen, Co-Chairman and Co-CEO, stated that since the beginning of the year, competition in the e-commerce sector has intensified, and the global environment has become more complex compared to last year. Increased uncertainty in economic, trade, and regulatory policies across countries and regions will inevitably pose more challenges to the company’s future performance and exert short-term pressure on profitability.

Zhao Jiazhen reaffirmed that the company prioritizes long-term platform ecosystem value over short-term financial performance. As the company continues strategic investments amid a complex macro environment, profit margins will fluctuate across quarters, which is expected to become normal.

In the last quarter, Pinduoduo’s online marketing services and other business revenue reached 60.01 billion yuan, up 5% year-over-year. Transaction service revenue was 63.9 billion yuan, up 19%.

Looking ahead to 2025, Pinduoduo’s total revenue is projected to reach 431.85 billion yuan, a 10% increase year-over-year. Net profit is expected to be 99.36 billion yuan, with an adjusted net profit of 107.3 billion yuan, both down 12%.