Shares of Pinduoduo Inc. PDD, +0.31% shot up 5.1% in premarket trading Wednesday, after the China-based mobile marketplace reported a narrower-than-expected first-quarter loss and revenue that more than tripled to beat expectations. The net loss narrowed to RMB2.91 billion ($443.5 million), or RMB2.33 a share, from RMB4.12 billion, or RMB3.54 a share, compared with the FactSet consensus for net losses per share of RMB3.35. Excluding nonrecurring items, the adjusted loss was RMB1.89 billion, beating the FactSet loss consensus of RMB2.05 billion. Revenue jumped 239% to RMB22.17 billion ($3.38 billion), well above the FactSet consensus of RMB19.82 billion, as average monthly active users grew 49% to 724.6 million and active buyers increased 31% to 823.8 million. Online marketing services revenue rose 157% to RMB14.11 billion and transaction services revenue grew 180% to RMB2.93 billion. Gross profit as a percentage of sales declined to 51.5% from 72.0%. “Our growing scale gives us both greater capacity and responsibility to live up to our mission to ‘benefit all’,” said Chief Executive Lei Chen. “We envision Pinduoduo as a platform that not only facilitates the trading of goods and services but also serves as a conduit for turning ideas into solutions to everyday problems.” The stock has dropped 26.4% year to date through Tuesday, while the iShares MSCI China ETF MCHI, +2.12% has edged up 0.4% and the S&P 500 SPX, -0.21% has gained 11.5%.
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