Chinese e-commerce firm Pinduoduo (NASDAQ: PDD) on Monday reported first-quarter losses that widened year-over-year, but were narrower than what the street had anticipated. Adjusted for one-time costs, the firm lost RMB 1.20 (20 cents) per ADS in Q4, better than a loss of 38 cents per ADS expected by the street.
Meanwhile, the top line soared 228% compared to the same quarter last year to a better-than-expected RMB 4.5 billion ($677.3 million), riding on its online marketing services. Analysts had projected Q1 revenues of $620.08 million.
PDD stock ended its last trading session down 0.7% on Friday. Since its market debut, the stock has so far gained about 21%.
In Q1, the strong financials come on the back of improved user engagement. Average monthly active users grew 74% to 289.7 million, while gross merchandise volume soared 181% $ 83.1 billion.
Active buyers increased 50% year-over-year.
CEO Zheng Huang said, “These metrics reflect our success in increasing user engagement and improving user experience. We will continue to invest strategically in our users and merchants in 2019 and drive greater engagement with more practical functions and fun features.”
Pinduoduo, which went public in June last year, was one of the biggest Chinese IPOs in 2018. The company is known to sell inexpensive items at attractive bargains, focused at price-conscious customers.
In an investor letter made public earlier this month, the company claims to be the second largest online marketplace in China by electronic records, following Alibaba (NYSE: BABA). If this is true, it means Pinduoduo has surpassed JD.com (NASDAQ: JD) in terms of electronic records.
Pinduoduo featured in the recently published US Trade Representative’s blacklist for the suspected fake items sold on the site, along with Alibaba’s Taobao. The management had earlier rubbished this report and may provide further clarification during the earnings conference call on Monday.