PDD Holdings, the parent company of the Temu platform, announced a significant decline in its profit for Q1 2025, driven by various factors including fierce competition in the domestic market and the impact of US tariffs.
Key Financial Indicators
PDD Holdings reported a profit of $2.05 billion, down 47% compared to the same period last year. The company's stocks fell over 17% in response to disappointing quarterly results.
Impact of Tariffs on Business
MScience analyst Vinci Zhang noted, 'PDD's massive bottom line miss is due to much weaker than expected operating margin, likely impacted by U.S. tariffs.' This decline is associated with a 15% increase in online marketing services and other revenue, surpassing the expected 13.5%.
Company Outlook
Despite current challenges, analysts express confidence in PDD Holdings' long-term prospects. The company is projected to reach a share price of $156 by the year's end, despite declines in profit and revenue for Q1 2025.
The profit decline of PDD Holdings in Q1 2025 highlights significant challenges for the company, such as tariffs and competitive pressures in the domestic market. However, long-term forecasts remain optimistic.
