Latest news with #PDDHoldingsInc
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2 days ago
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PDD Holdings Inc. (PDD): Jim Cramer Shares 'Death Rattle' For Firm
We recently published a list of . In this article, we are going to take a look at where PDD Holdings Inc. (NASDAQ:PDD) stands against other stocks that Jim Cramer discusses. PDD Holdings Inc. (NASDAQ:PDD) is a Chinese eCommerce company whose shares are flat year-to-date. Since it sources products from China and sells them in America, the firm has been caught in the center of trade tensions between the US and China. PDD Holdings Inc. (NASDAQ:PDD) had relied on the Deminimis rule to ship its products in the US. This rule exempted its parcels from tariffs, and once the exemption was lifted, the firm faced significant uncertainty. PDD Holdings Inc. (NASDAQ:PDD)'s shares sank by 19% in the days after its first quarter earnings that saw net profit drop by a whopping 47%. Cramer's remarks about the firm focused on the firm's warning that it was facing a growth slowdown and had to invest in order to support its customers and merchants. Here is what he said about PDD Holdings Inc. (NASDAQ:PDD): 'Did you see they said 'radical change in external policy environment, such as tariffs, has created significant pressure for our merchants, who often like the capability to quickly, and effectively, deal with this.' I think that means, death rattle David. . .well because if they can't adapt to the new world, this is virtually a trade embargo for their deminimis nonsense that they send over here that I've told you about when I ordered.' A close-up of a customer using the company's e-commerce platform whilst shopping online. Overall, PDD ranks 12th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of PDD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-05-2025
- Business
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PDD Holdings Inc. (PDD): A Bull Case Theory
We came across a bullish thesis on PDD Holdings Inc. (PDD) on LongYield's Substack. In this article, we will summarize the bulls' thesis on PDD. PDD Holdings Inc. (PDD)'s share was trading at $97.88 as of 28th May. PDD's trailing and forward P/E were 10.53 and 7.76 respectively according to Yahoo Finance. Pixabay/Public domain PDD Holdings Inc., the parent company of Pinduoduo and Temu, delivered strong top-line growth in Q1 2025, with revenue rising 10% year-over-year to RMB 95.7 billion (US$13.184 billion), driven by robust performance in online marketing and transaction services. While near-term profitability declined—operating profit fell 38% and net income dropped 47%—these figures reflect PDD's deliberate and strategic reinvestment into its ecosystem. The company significantly ramped up spending in sales and marketing (+43%) and R&D (+23%) to strengthen its merchant base, upgrade supply chains, and support long-term competitiveness. This aggressive reinvestment positions PDD for sustained value creation, especially as consumer behavior increasingly favors affordable, high-quality offerings—PDD's core strength. With a powerful balance sheet, including RMB 364.5 billion (US$50.3 billion) in cash and short-term investments and no significant debt, the company is well-capitalized to weather macro uncertainties and accelerate its global expansion through Temu. The international platform continues to gain traction and, with careful navigation of geopolitical risks, could become a major growth engine. PDD's unique value-for-money positioning, group-buying model, and focus on underserved SMEs differentiate it from peers like Alibaba and Strategic initiatives such as a RMB 100 billion merchant support program, supply chain investments, and consumer incentives reinforce its ecosystem advantage. Though short-term margins are compressed, the long-term outlook remains compelling. With unmatched financial flexibility, rising global brand awareness, and a focus on sustainable growth, PDD is well-positioned to emerge as a dominant global e-commerce player over the next decade. Previously, we have covered PDD Holdings Inc. (PDD) in February 2025, wherein we summarized a bullish thesis by Favona Hathaway on Substack. The company was highlighted for its rapid growth, strong financials, and dominant position in value-for-money e-commerce through its C2M model and global expansion via Temu. The article noted PDD's impressive revenue and profit CAGR since 2021, minimal debt, and potential for a 144% market cap upside by 2029, despite geopolitical and macroeconomic risks. Since our last coverage, the stock is down 21% as of 28th May. PDD Holdings Inc. (PDD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 87 hedge fund portfolios held PDD at the end of the first quarter which was 85 in the previous quarter. While we acknowledge the risk and potential of PDD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PDD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
28-05-2025
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JPMorgan Cuts PDD Holdings (PDD) Price Target on Growth Concerns
Analysts at JPMorgan have reiterated a Neutral rating on PDD Holdings Inc. (NASDAQ:PDD) and cut the price target to $105 from $125 on May 28. The adjustment comes on the Chinese commerce giant delivering disappointing quarterly results. Its net profit fell 47% in Q1 2025, hurt by tariffs and stiff competition. A financial analyst reviewing stock prices on a graph with a positive outlook. While the company's first-quarter revenue rose 10% to 95.67 billion yuan, it fell short of the 104.41 billion yuan analysts expected. It also marked the slowest top-line growth since 2022. Exacerbating the underperformance is that net profit fell to 14.74 billion yuan, missing consensus estimates of 26.12 billion yuan. Consequently, PDD margins plunged to 19% from 36%. Analysts at JPMorgan expect PDD holding's share price to consolidate until it releases Q2 2025 results in August. Similarly, revenue growth is expected to remain flat if trade tariffs stay in place, even though the Chinese marketplace could sustain growth. JPMorgan analysts remain wary of the fact that PDD Holdings faces setbacks in its global ambitions. The Chinese company is exploring ways of scaling its Temu shopping platform, which has become a hit with budget-conscious customers in the US. However, escalating tensions with the US resulting in trade tariffs have already forced the company to raise prices on the platform. PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. It operates the Pinduoduo platform and Temu, an online platform that enables merchants to streamline their manufacturing and operations. While we acknowledge the potential of PDD Holdings Inc. (NASDAQ:PDD) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PDD and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
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JPMorgan Cuts PDD Holdings (PDD) Price Target on Growth Concerns
Analysts at JPMorgan have reiterated a Neutral rating on PDD Holdings Inc. (NASDAQ:PDD) and cut the price target to $105 from $125 on May 28. The adjustment comes on the Chinese commerce giant delivering disappointing quarterly results. Its net profit fell 47% in Q1 2025, hurt by tariffs and stiff competition. A financial analyst reviewing stock prices on a graph with a positive outlook. While the company's first-quarter revenue rose 10% to 95.67 billion yuan, it fell short of the 104.41 billion yuan analysts expected. It also marked the slowest top-line growth since 2022. Exacerbating the underperformance is that net profit fell to 14.74 billion yuan, missing consensus estimates of 26.12 billion yuan. Consequently, PDD margins plunged to 19% from 36%. Analysts at JPMorgan expect PDD holding's share price to consolidate until it releases Q2 2025 results in August. Similarly, revenue growth is expected to remain flat if trade tariffs stay in place, even though the Chinese marketplace could sustain growth. JPMorgan analysts remain wary of the fact that PDD Holdings faces setbacks in its global ambitions. The Chinese company is exploring ways of scaling its Temu shopping platform, which has become a hit with budget-conscious customers in the US. However, escalating tensions with the US resulting in trade tariffs have already forced the company to raise prices on the platform. PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. It operates the Pinduoduo platform and Temu, an online platform that enables merchants to streamline their manufacturing and operations. While we acknowledge the potential of PDD Holdings Inc. (NASDAQ:PDD) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PDD and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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28-05-2025
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Q1 2025 PDD Holdings Inc Earnings Call
Lei Chen; Chairman of the Board, Co-Chief Executive Officer; PDD Holdings Inc Jiazhen Zhao; Co-Chief Executive Officer, Director; PDD Holdings Inc Jun Liu; Vice President - Finance; PDD Holdings Inc Alicia Yap; Analyst; Citi Kenneth Fong; Analyst; UBS Joyce Ju; Analyst; BofA Global Research (Hong Kong) Operator Ladies and gentlemen, thank you for standing by, and welcome to PDD Holdings Inc.'s first-quarter 2025 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.I would now like to hand the conference over to your host today. Sir, please go ahead. Thank you, operator. Hello, everyone, and thank you for joining us today. PDD Holdings' earnings release was distributed earlier and is available on our website at as well as through the GlobeNewswire we start, I'd like to refer you to our Safe Harbor statement in the earnings press release, which applies to this call, as well as make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP us today on the call are Mr. Chen Lei, our Chairman and Co-Chief Executive Officer; Mr. Zhao Jiazhen, our Executive Director and Co-Chief Executive Officer; and Ms. Liu Jun, our VP of Finance. Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus. Jun will then walk us through our financial results for the first quarter ended March 31, the Q&A session, Lei and Jiazhen will answer questions in Chinese and will help translate. Please kindly note that the English translation is for reference only, and in case of any discrepancy, statements in the original language should it's my pleasure to introduce our Chairman and Co-Chief Executive Officer, Chen Lei. Lei, please go ahead. Lei Chen Hello, everyone. Thank you for joining our earnings call for the first quarter the past year, we accelerated the execution of a high-quality development strategy, extending our efforts from platform operations to a broader ecosystem and covering both the supply side and demand side. Through initiatives such as a RMB10 billion fee reduction program, logistic support for the remote regions, and high-quality supply initiatives, we broadened the product selection for consumers and accelerated supply chain transformation. This marks a new chapter in the e-commerce sector that prioritizes merchant support and ecosystem at the beginning of this year, we made substantial investments in our platform ecosystem and made a rapid shift in external environment. To increase merchant support, we established the Merchant Rights Protection Committee and launched the RMB100 billion support program, which is a major strategic decision for the next phase of our high-quality development one hand, the program is designed to further lower fees for our merchants, improving the business environment of our platform. On the other hand, we will also invest more to drive sales for our merchants and to help them better adapt to new Q1, our revenues were RMB95.7 billion, which slowed down notably amid rapid trends in the external environment and, at the same, time due to the mismatch between business investment and return cycles. Through our revenue growth and our substantial ecosystem investments led to a significant drop in communicated a few times in the past quarters, as our revenues grow and new challenges emerge, a slowdown in growth rate is inevitable. This trend has been further accelerated by the trends in the external environment in the past a disproportionate drop in profit this quarter can be attributed to three different factors, they all trace back to one underlying consideration. And that is, during a period of uncertainties, when merchants face difficulties, we choose to invest more to help our merchants grow their business and reduce at the factors one by one, at first, competitions in Chinese e-commerce sectors have further intensified. As a third-party marketplace, we face inherent limitations when it comes to passing on policy incentives to consumers, which puts our merchants at a clear disadvantage compared to our competitors that have a first-party business. While this issue has been discussed last year, the challenge is still here due to a limitation in our team's second, in our global business, radical trends in external policy environments, such as tariffs, have created significant pressure for our merchants, who often lack the capability to adapt quickly and effectively. And third, since the second half of last year, we significantly expanded our fee reduction program for merchants under the RMB10 billion fee reduction program, which is a key initiative in driving the high-quality development of the platform this year, after it has become increasingly clear that the merchants are expected to face further pressure and convinced in the long-term value of our merchant support initiatives, the management team made the strategic decision to launch the RMB100 billion support program. Under this updated program, we are committing significant resources to support the platform ecosystem through uncertain is not an empty slogan, but a real commitment backed by tangible investments. We understand a marketplace platform is built on collective success of its merchants. In challenging times like these, it is essential for us to step forward and to help our merchants endure and emerge more resilient. If we do nothing, merchants could be overwhelmed by these external shocks. Only when merchants strive can consumers receive quality products and services, and only then can the platform achieve long-term sustainable management team believes that, in a fast-changing market where merchants are facing challenges, it is our obligation to invest decisively to support consumers and merchants, putting their needs ahead of those of the platform. And we believe that these initiatives are investments that will ultimately lead to a stronger and higher quality merchant ecosystem over the long run. These efforts will likely weigh on our profitability in the short term and even for a considerable period of time to as stated in our first shareholder letter, we are not a conventional company and we do not evaluate our strategic decisions based on quarterly financial results. Instead, our focus is on long-term intrinsic value over five years, 10 years, or even longer, and we believe our long-term investors will share this seen from another angle, the decline in profit this quarter can be attributed to one overarching factor, which we consider our merchant support initiatives long-term investment. They are treated as accounting expenses. A timing mismatch between when expenses are recorded and when the long-term returns materialize is expected to persist for some time to come and will continue to weigh on our are firmly committed to long-term investments in our platform ecosystem and to deepening our execution of high-quality development strategies. And we believe by prioritizing the needs and interests of our merchants and consumers through these uncertainties, we can help them emerge stronger and create the room for focus on high-quality sustainable now, I will hand it over to our Co-CEO, Zhao Jiazhen, to share more about our development plans in 2025. Jiazhen Zhao (interpreted) Thank you, Lei. Hello, everyone. This is Zhao Jiazhen. Thank you for joining our first-quarter 2025 earnings the past few quarters, our high-quality development strategy has entered a new phase. A series of initiatives such as fee reductions and merchant support programs have delivered solid results. Our fully-committed efforts to build a win-win ecosystem are now generating tangible benefits to a broad base of users and tens of millions of the beginning of this year, as Chen Lei mentioned, to tackle new challenges together with our merchants, we have scaled up our commitment to high-quality development and upgraded initiatives such as the RMB10 billion fee reduction program to the more comprehensive RMB100 billion support program. This upgraded strategy calls for the entire company to work together and fully devote ourselves to take on our social responsibilities as a platform at such a critical stage, providing merchants with greater certainty and offering consumers a more trustworthy shopping the supply side, under the RMB100 billion support program, we will further increase investment in high-quality supply, expanding our support for high-quality merchants from top and mid-tier merchants to small and medium-sized. We are committed to focusing more on supporting the smaller merchants, which is the heart of critical steps toward achieving high-quality one hand, we will continue exploring more fee reduction initiatives to help merchants lower costs and create more room for cost flexibility, business growth, and innovation. On the other hand, we will extend comprehensive support, including traffic resources, black label premium store programs, digital resources, and technology capabilities, to empower small and medium-sized merchants, unlock their potential, and drive broader, higher-quality upgrades across the supply the beginning of this year, our dedicated team for high-quality merchant support programs has visited frontline manufacturing bases such as Coupwear in Yongkang, Women's Fitwear in Wenzhou, Consumer Electronics in Shenzhen, Athletic Shoes in Jingjiang, and Running Shoes in Jing'an. We are pleased to see that the merchants and the broader supply chain have made notable progress in transformation with the platform's comprehensive merchants are transitioning from traditional OEM and distribution mindsets toward user-oriented and brand-driven approaches. This shift has enabled them to pursue differentiated development paths amid homogeneous competition. Moreover, fee savings are being reinvested into new product development, warehouse upgrades, and supply chain transformation, accelerating high-quality transitions across major a platform rooted in agriculture, our RMB100 billion support program will also enhance support for agricultural products. Recently, we officially launched the 2025 Duoduo Specialty initiative. The first phase of the initiative has covered key agricultural regions including Jiangsu Lianyungang, Fujian Ningde, Hainan Wanning, Shanxi Yuncheng, Guangdong Maoming, Sichuan Chengdu, and Liaoning are implementing tailored strategies across agricultural product categories such as local farm products, fruits, seafood, and poultry, deeply integrating with regional agricultural industries and providing one-on-one guidance to small merchants. Through these initiatives, we aim to explore new models for agricultural product distribution, enhance value-add, and drive production and income growth across the agricultural the papaya-producing region of Yunnan Mengzi, with the support from our platform, local merchants have developed a digital system for agricultural product operation, enabling automation across harvesting, listing, pricing, logistics, after-sales services, and traceability. This system addresses key industry pain points such as unclear pricing and high spoilage rates, driving the transition from experience-based to data-driven operations and enabling the modernization of the traditional agriculture supply the demand side, the RMB10 billion support program has also launched several giveback initiatives to benefit consumers. Our RMB10 billion program has introduced a new RMB10 billion merchant giveback program, rollling out RMB10 billion consumer coupons. Through dedicated campaigns such as the RMB10 billion coupon program and RMB10 billion level-up program, we deliver additional coupons across all product categories to meet consumers' functional and personalized needs, while improving supply-demand matching efficiency and supporting business growth for high-quality merchants and addition, we further enhanced our direct discount program. While fully safeguarding merchants' interests, we benchmarked prices against the national subsidy program across multiple categories to provide real savings to consumers and stimulate consumer demand, aiming at compensating for the disadvantages under the national subsidy schemes and support merchants in strengthening their overall market position. While such investments may weigh on short-term profitability, we believe they are necessary and worthwhile as they help create unique opportunities to achieve high-quality growth for the small and medium-sized merchants on our the face of a complex and evolving environment, we remain committed to building a business ecosystem in which users, merchants, and the platform thrive together. We will continue to increase investments on both the supply and demand side to help our merchants emerge stronger from these uncertainties, create more valuable experiences for consumers, and generate greater positive impact for the society.I will now hand it over to Jun. She will provide you with an update on our Q1 financial performance. Jun Liu Thank you, Jiazhen. Hello, everyone. Let me walk you through our financial performance for the first quarter ended March 31, terms of income statement, in the first quarter, our total revenues increased 10% year over year to RMB95.7 billion. This was mainly driven by an increase in revenues from online marketing services and transaction services. Revenues from online marketing services and others were RMB48.7 billion this quarter, up 15% from the same quarter of 2024. Revenues from transaction services were RMB47 billion, up 6% from the same quarter last on to costs and expenses. Our total cost of revenues increased 25% from RMB32.7 billion in Q1 2024 to RMB40.9 billion this quarter, mainly due to increase in fulfillment fees and payment processing fees. On a GAAP basis, total operating expenses this quarter increased 37% to RMB38.6 billion from RMB28.1 billion in same quarter of 2024. On a non-GAAP basis, total operating expenses increased to RMB36.5 billion this quarter from RMB25.6 billion in Q1 the first quarter, we further increased our platform ecosystem investments through expanded merchant support initiatives to help merchants increase sales and reduce costs. Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 38% compared to 29% in the same quarter last to specific expense items. Our non-GAAP sales and marketing expenses this quarter were RMB32.8 billion, up 44% versus the same quarter last year. In the first quarter, we continued to give back to consumers through promotional programs and increased marketing support for high-quality margins to help grow their businesses. On a non-GAAP basis, our sales and marketing expenses as a percentage of our revenues this quarter was 34%, versus 26% for the same quarter last non-GAAP general and administrative expenses were RMB735 million versus RMB572 million in the same quarter of 2024. Our research and development expenses were RMB3 billion this quarter on a non-GAAP basis and RMB3.6 billion on a GAAP basis, up 23% year over a GAAP basis, operating profit for the quarter was RMB16.1 billion versus RMB26 billion in the same quarter last year. Non-GAAP operating profit was RMB18.3 billion versus RMB28.6 billion in the same quarter last year. Non-GAAP operating profit margin was 19% this quarter, down from 33% for the same quarter last income attributable to ordinary shareholders was RMB14.7 billion for the quarter, compared to RMB28 billion in the same quarter last earnings per ADS was RMB10.59 and diluted earnings per ADS was RMB9.94, versus basic earnings per ADS of RMB20.33 and diluted earnings per ADS of RMB18.96 in the same quarter of 2024. Non-GAAP net income attributable to ordinary shareholders was RMB16.9 billion versus RMB30.6 billion in the same quarter last year. Non-GAAP diluted earnings per ADS was RMB11.41 versus RMB20.72 in the same quarter of the first quarter, we see a slowdown in revenue growth as our business scales and challenges emerge. Looking ahead, our financial results may continue to reflect the impact of sustained investments in ecosystems as we support merchants and consumers through uncertain times. That concludes the income let me move on to cash flow. Our net cash generated from operating activities was RMB15.5 billion compared with RMB21.1 billion in the same quarter last year. As of March 31, 2025, we have RMB364.5 billion in cash, cash equivalents, and short-term you. This concludes my prepared remarks. Thank you, we'll move on to the Q&A session. Today's Q&A session, Lei, Jiazhen, and Jun will take questions from analysts on the line. We will take a maximum of two questions from each analyst. Lei and Jiazhen will answer questions in Chinese, and we will help translate for convenience we're open for questions. Operator (Operator Instructions) Alicia Yap, Citigroup. Alicia Yap (spoken in foreign language) I have 2 questions. First is that we noticed in management's prepared remarks that recent macro policy changes, including the tariffs have placed considerable pressures on the merchant. And the market is also keen to understand what preparations and measure the platform has taken in response to such a highly uncertain external environment. How are we adjusting our business model in certain markets? And also what's the current progress?The second question is on this quarter, we obviously noticed a very significant decline in the company's net profit margins, along with a year-over-year decrease in the net profit number. Can management elaborate a little bit more on the factors that contributing to this decline? And what are we seeing in the second quarter? Does the management expect this trend to continue? Thank you. Lei Chen (interpreted) Alicia, this is Chen Lei. Let me take your first question. As we have emphasized in the past few quarters, in response to macro policy changes and external headwinds, we will continue to take proactive actions while strictly upholding regulatory compliance. Over the past few years, our long-term investments next supply chain, together with our work in advancing new business models have enabled us to accumulate substantial supply chain and operational know-how. And guided by our high-quality development strategy and operating under strict regulatory compliance, we'll stay focused on our core business and enhance our competitive strength through sustained investments in supply chain service capabilities and the platform merchants are under considerable pressure given the recent policy changes and many like capability to respond effectively, making it very challenging for them to keep up. In light of these circumstances, we believe it is our obligation as a platform to increase support for merchants and invest platform resources to support their businesses. the RMB100 billion support program we mentioned earlier is designed for this exact reason and to increase our support efforts for small and medium-sized merchants. And through stabilizing sales and lowering cost for them, we see help them manage risks arising from the rapidly evolving market environment and given them the time and flexibility that will be necessary to pursue sustained growth. In addition, we will continue to explore new business models, deepen our market presence and expand into new product categories and services to build a more robust platform a rapidly changing external environment, our global business is working with merchants across the region to bring stable prices and abundant supply to consumers around the world. No matter how policies shift, we'll continue to strengthen our operations in the markets we serve, helping more local merchants grow on our platform and enabling more orders to be fulfilled from local warehouses. And right now, we are seeing these merchants becoming more proactive with better stock inventory and more value passed on to consumers through differentiated products and services. Platform is a selective of merchants. We believe only will merchants achieve long-term sustainable growth, can our consumers receive high-quality products and therefore, in times of external shocks of policy changes, for merchant space difficulties, we feel a strong obligation to support our merchants to navigate through these external uncertainties. And this is why we launched the RMB100 billion support program to foster long-term and healthy merchant ecosystem that will be essential to achieving high-quality development. Thank you. Jun Liu Alicia, this is Jun. Let me take your second question regarding profitability. As we have communicated over the past few quarters, a slowdown in growth rate is inevitable as our business scales, competition intensifies and external uncertainty match. This trend has been further accelerated by changes to make internal environment in the first quarter. And our revenue growth has slowed the same time, the slowing revenue growth and our continuous ecosystem investments result in a significant drop in profit this quarter. This is mainly due to the mismatch between the business investment and writing cycles. As mentioned in our prepared remarks, the market is ongoing road changes at the moment. FM e-commerce platform, merchants and platforms work together in serving our consumers. It has done the best to such have increased our investments in the platform ecosystem. Putting our consumers and merchants first, we believe this responsibility, the platform must take on in this environment. In owing batteries, we can build an ecosystem that benefits all stakeholders in the long term. Our initiative to support emerging ecosystem include merchant fee reduction and marketing support for high-quality merchants. This will have financial impact on revenue growth and we view these expenses with long-term investments. They're remaining a match between the return and business investment cycles. Therefore, our profitability is likely to face challenges in the near term, and potentially over a longer period. As I mentioned, we're not a conventional company. In our investment decisions, we do not place too much emphasis on financial performance in a single quarter, but we already had long-term intrinsic fluctuations will not change our focus on long-term value creation. In the past 2 quarters, through initiatives such as the Canons reduction program, we're already seeing positive impacts on ecosystem. Going forward, we will expand the reach for merchant support to benefit more SME businesses, helping them navigate market cycles and achieve high-quality growth. Thank you. Operator, let's move on to the next analyst on the line. Operator Kenneth Fong, UBS. Kenneth Fong (spoken in foreign language) We noted that following the company's substantial support for the merchants for the RMB10 billion fee reduction program last year, you have initiated and upgrade RMB100 billion support program. The market is keen to understand how this initiative will be delivered to the merchants. And would that be -- and how would you think about the long-term impact on the company's financial performance?And the second question is a few quarters ago and the prepared remarks just now, management mentioned that the company has certain limitation and disadvantage when it comes to benefiting from the macro policy initiative. Could management elaborate on how the company responds to the policies such as the national subsidies program? And what plans are in place to address the current situation? Thank you. Jiazhen Zhao (interpreted) Hello, this is Zhao Jiazhen. Let me take your question on RMB100 billion support program. Since the second half of last year, our merchant support initiatives, including the RMB10 billion fee reduction program, logistics support for remote regions and the high-quality merchant support program have delivered solid results, enabling tens of millions of merchants to enhance operational efficiency and reduce costs and building merchants and the broader supply chain transition towards a new stage of high-quality supply. We're fully aware that our investments in the merchant ecosystem and supporting measures for supply chain transformation will ultimately translate into higher quality product offerings and services, which benefit consumers and create a win-win platform ecosystem. We believe this is the path to long-term healthy development for our the face of increasing external uncertainties, we believe it is our responsibility as the platform to strengthen ecosystem support and prioritize the interest of merchants and consumers. Therefore, our upgrade RMB100 billion support program will be backed by substantial financial commitment and if not an empty's locus. The core of the upgraded RMB100 billion support program is the significant increase in investment on bare feet supply and demand side. On the supply side, more merchants will receive our support as we extend the coverage of high-quality merchant support program from top and mid-tier merchants to small- and medium-sized ones. This means more high-quality merchants will benefit from the platform's high-quality aim to help release the full potential of these smaller merchants and drive broader and higher-quality supply chain upgrades across the platform. On the demand side, beyond the improvement in product and service quality brought by the supply side upgrade, the RMB100 billion support program also includes a range of new gift-back initiatives. For example, under the RMB10 billion program, we launched a new RMB10 billion merchant give back program, offering additional coupons across all categories to meet diverse consumer demand. In addition, we have further upgraded our direct discount programs by benchmarking prices against the national subsidy program across multiple categories, offering real savings to consumers while improving sales for merchants, faltering a healthier operating environment. We are a platform that is a collective of together with merchants to deliver high-quality products and services to consumers is the foundation of our business development. We believe that long-term investment in the platform ecosystems and prioritizing the needs of consumers and merchants amid external uncertainties is the only path to achieving long-term, high-quality and sustainable growth in today's environment. Regarding your second question, as stated in our prepared remarks, our third-party marketplace model has inherent limitations when it comes to certain policy incentives. And we are at disadvantages compared to platforms that primarily operate under the third-party model. This also affects the price competitiveness of our merchants in certain protect the interest of both consumers and merchants on our platform, we have leveraged internal resources and responded resolutely with increased investments, helping our merchants and medium-sized merchants maintain competitiveness and increase sales. Since January this year, we have launched a dedicated page for the national subsidy program. In addition, portfolio support for merchants entered RMB100 billion program, we are also enhancing our promotional efforts on the consumer side. Currently, our dedicated national subsidy churn already covers more than 20 provinces and we provide additional coupons on top of the government subsidies, delivering further savings directly to consumers. Moreover, the platform will continue to benchmark prices against the national subsidy program and expand the promotion coverage to categories such as daily measures aim to provide more savings to consumers, stimulate broader consumer demand and create incremental market opportunities for the merchants. While such investments may weigh on short-term profitability, we believe they are necessary and worthwhile as they help the merchants improve inventory position, manage capacity and get the small- and medium-sized merchants, the room to focus on high-quality, differentiated growth on our platform. Thank you, Kenny. Operator, let's move on to the next analyst. Operator Joyce Ju, Bank of America. Joyce Ju (spoken in foreign language) I will translate myself. First, we know China's e-commerce competition remains intense. And as Manage mentioned, is facing challenge in competing with first-party online retailers due to disadvantage in getting trading subsidies. How does management view competition in current market environment? And what are strengths and limitations of your third-party platform model?Secondly, may we have an update on overall consumption momentum as this year's June promotion already underway. Could management share some colors on platform performance and also key trends observed so far? Thank you very much. Lei Chen (interpreted) Hello, this is Chen Lei. Let me take your first question. As we mentioned earlier in the prepared remarks, platform is collective of its merchant and our development cannot be separated from the health of the merchant ecosystem. And in today's environment, with increasingly intensifying competition and rapidly evolving policy landscape, many of the merchants lack the capabilities to respond and adapt and are indeed facing challenges. As an e-commerce platform, we are very aware that we and the merchants are in this business model is a marketplace naturally shaped the simpler and more direct response to the challenges we face. If the platform sells to stepping and offer support when merchants are experiencing difficulties, the merchants may be overwhelmed by the short-term market volatilities. It is only where merchants are doing well, can we deliver high-quality products and services to consumers and meet their increasingly diverse consumption needs. We believe this is not only the responsibility that e-commerce platform should take on, but also fundamental to building a healthy and sustainable e-commerce over the years, in order to better serve the merchant, we have rooted ourselves in the e-commerce supply chain and made substantial investments and leveraging our technology economies of scale. And the platform's digital capabilities and resources, we supported merchants to innovate in the product development, technology and operations and we'll help them expand market reach. And these long-term efforts have allowed us to accumulate the relevant supply chain knowhow and saw encouraging results from the RMB10 billion fee reduction program launched in the second half of last year, which brought tangible benefits for our merchants. And building on this foundation, we decided to launch the updated RMB100 billion support program to further expand the coverage of our merchant support efforts. And these initiatives will extend support to more small- and medium-sized merchants, enabling more high-quality merchants to benefit from the platform's high-quality development. And in this current environment, we believe it is the platform's responsibility to invest more to help merchants navigate the market cycles. We are confident that such efforts will ultimately lead to a more robust merchant ecosystem over the long run. Jiazhen Zhao (interpreted) Hello, this is Zhao Jiazhen. Let me take your second question. When it comes to shopping festivals, what consumers value are simplified mechanisms and real savings, which is the philosophy that allies with our approach we've always taken on the consumer side. We've continued to up this point appearing this year's June 16 shopping festival. By combining the campaign with our RMB10 billion program, we are enabling consumers to access high-quality products at compelling prices, while driving sales for our on this, we are also enhancing quality and services to better cater to consumers' evolving needs. This year, we've introduced the price drop protection service for product participating the June 16 promotion to further improve consumers' shopping experience. We hope that our platform and our merchants can together excel in quality and service, build consumer trust safeguard consumer rights and, in turn, drive sustainable sales growth. This is part of our vision for a win-win e-commerce ecosystem that benefits our stakeholders. Thank you. Joyce Ju Thank you. Thank you, Joyce, and thank you all for joining us today. It's about time, and we look forward to speaking with you again next quarter. Thank you, and have a great day. Operator Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect. Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
