China's Temu owner sees profit plunge as trade tensions linger
Image: Jonathan Raa / NurPhoto / NurPhoto via AFP
Chinese e-commerce giant PDD Holdings saw net profit almost halve in the first three months of the year as the Temu owner prepared for a blistering trade war between Beijing and Washington.
The Shanghai-based company said net profit came in at 14.7 billion yuan ($2 billion) in the three months ending March 31, down 47% year on year.
The drop came as the economic superpowers are locked in another bruising trade standoff that saw US President Donald Trump last month scrap a customs exemption for goods valued under $800.
The exemption was long a vital part of the business model supporting platforms offering low-cost goods like Temu.
In a statement with the earnings release on Tuesday, PDD Holdings' co-chief executive Lei Chen said the company made "substantial investments...to support merchants and consumers" and deal with "rapid changes in the external environment".
"These investments weighed on short-term profitability but gave merchants the room to adapt", he said, insisting they were focused on "strengthening the (platform's) long-term health".
The firm also saw revenue growth slow for a fourth straight quarter.
It said revenue in the first quarter rose 10% on-year to 95.7 billion yuan.
But that was down on the 24% growth recorded in the previous three months -- and a severe drop from the 131% growth it saw at the start of 2024.
The growth slowdown was "expected", said PDD Holdings' vice president of finance Jun Liu, adding that the downturn was "accelerated by the changes in the external environment".
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
Ad Loading
She warned that the company's financial results "may continue to reflect the impact of sustained investments... through uncertain times".
PDD's New York-listed depository receipts plunged more than 13%.
As part of a detente in the tariff standoff between China and the United States, Trump signed an executive order this month that set duties on "de minimis" items sent through the US Postal Service to 54% of their value, or a $100 payment.
A prior tariff had been set at 120%.
AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
TimesLIVE
7 minutes ago
- TimesLIVE
Pentagon Golden Dome to have 4-layer defence system, slides show
The Trump administration's flagship Golden Dome missile defence system will include four layers — one satellite-based and three on land — with 11 short-range batteries across the continental US, Alaska and Hawaii, according to a US government slide presentation on the project. The slides, tagged 'Go Fast, Think Big!', were presented to 3,000 defence contractors in Huntsville, Alabama, last week and reveal the unprecedented complexity of the system, which faces an ambitious 2028 deadline set by US President Donald Trump. The system is estimated to cost $175bn (R3.06-trillion), but the slides show uncertainties loom over the basic architecture of the project because the number of launchers, interceptors, ground stations and missile sites needed for the system has yet to be determined. 'They have a lot of money, but they don't have a target of what it costs yet,' said one US official. So far Congress has appropriated $25bn (R437.69bn) for Golden Dome in Trump's tax-and-spend bill passed in July. Another $45.3bn (R793.09bn) is earmarked for Golden Dome in his 2026 presidential budget request. Intended as a multilayered missile defence shield for the US, Golden Dome draws inspiration from Israel's Iron Dome, but is significantly bigger due to the geography it will need to protect and the complexity due to the varied threats it will face.
IOL News
an hour ago
- IOL News
Will Suzuki build cars in SA? Minister Tau engaging with carmakers as tariff debate rages
Donald Trump's automotive tariffs, while only affecting the Mercedes-Benz operations in South Africa, have sparked conversations on whether the government is sufficiently protecting own market. According to Lightstone, around 37% of the vehicles that South Africans purchase are locally produced, while a significant 36% are imported from India and 11% from China. At a media event outlining South Africa's response to Donald Trump's tariffs, held in Pretoria on Tuesday, Minister of Trade and Industry, Parks Tau, revealed some interesting insights into the country's plan for the automotive industry. Asked whether the government was considering raising the import tariffs on Indian and Chinese vehicles in order to prevent our market from being flooded, Tau did not rule out such a move but said the Department of Trade, Industry and Commerce (DTIC) was not in favour of punitive measures. 'With regards to Chinese and Indian auto, it is a discussion that we're currently having with the intention of taking a less punitive approach, but rather taking a more proactive approach of getting some of those products manufactured in the country.' Tau said many Chinese manufacturers had expressed interest in establishing themselves in the country and were making contributions towards a revised Automotive Production and Development Program (APDP), which is currently under review. Tau said he could not comment on what the actual decision would be, regarding tariffs, but added that it was the government's intention to accelerate the policy development process and related instruments in the implementation of the APDP. Discussions with Suzuki Auto Earlier this year Naamsa CEO Mikel Mabasa revealed that at least three Chinese car manufacturers were considering setting up vehicle production facilities in South Africa. Interestingly, the DTIC has also been engaging with Suzuki Auto, which recently became the country's second best-selling brand, thanks largely to an affordable product portfolio sourced almost entirely from its Maruti Suzuki division in India. 'I should say that we spoke about the Chinese, but in the next two weeks, we'll also be engaging with both Japan and India. You would know that Suzuki has a great presence in the country right now, and we will be visiting. 'So whilst it's a Japanese company, they're exporting from India to the South African market. So we'll be touching (base with) both the parent company and the company that's exporting into the South African market to see how we can cooperate and collaborate, on the basis of seeking to attract them as an investor into our country. 'So we're not holding the stick as a starting point. We start with the carrot and then balance it with the stick," Tau concluded.
TimesLIVE
3 hours ago
- TimesLIVE
Porsche SE cuts outlook, plans bigger push into defence
Holding company Porsche SE, Volkswagen's largest shareholder, cut its full-year profit forecast on Wednesday, weighed down by the German carmaker's weak first-half performance, while reiterating its plans to invest in the defence sector. Why it's important US tariffs have dealt a heavy blow to global carmakers, forcing them to book billions of dollars in losses, issue profit warnings, slash forecasts and raise prices. Though the EU has reached a trade deal that brought US tariffs on EU-made cars down to 15% from the previously imposed 25%, some analysts remain cautious as the duty is far higher than the 2.5% rate before US President Donald Trump launched his trade offensive. German car and car parts makers are meanwhile exploring the defence sector as a potential growth avenue, as Europe ramps up military spending. Key quotes 'Against the backdrop of a changing geopolitical situation and growing security policy requirements, Porsche SE sees considerable development potential in the defence and security sector and intends to capitalise on this,' the company said in a statement. 'With regard to portfolio investments, our aim is to increase our involvement in the defence and defence-related sectors while maintaining our core focus on mobility and industrial technology,' chairperson Hans Dieter Poetsch said. By the numbers Porsche SE expects the adjusted group result after tax to land between €1.6bn (R32,860,000,000) and €3.6bn (R74,005,200,000) in 2025, compared with €2.4bn (R49,349,280,000) to €4.4bn (R90,469,676,000) anticipated earlier. It reported an adjusted net profit of €1.1bn (R22,617,419,000) for the first half of the year, down by nearly a half from last year's €2.1bn (R43,178,709,000). Context Porsche SE, controlled by the Porsche and Piech families, is highly exposed to Volkswagen's performance through its nearly 32% stake, which influences its valuation, earnings and financial guidance. It also owns 12.5% of luxury carmaker Porsche AG, with much of the rest held by the Volkswagen Group. For full-year 2024, Porsche SE had disclosed impairments of €19.9bn (R409,169,671,000) on VW and €3.4bn (R69,899,240,000) on Porsche AG.
