Pinduoduo Inc. (PDD) stock prices were up by 4.36% as of the market closing on May 28th, 2021, bringing the price per share up to USD$124.88 at the end of the trading day. Subsequent pre-market fluctuations saw the stock surge by another 4.96%, bringing it up to USD$131.07.
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Stellar Growth
Total revenues reported for the first quarter of the fiscal year 2021 were up by 239% to USD$3.3834 billion, as compared to the numbers reported in the same time period of the year prior. Average monthly active users grew from 487.4 million in the first quarter of 2020 to 724.6 million in Q1 2021, indicating a year-over-year increase of 49%.
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Promising Improvements
Active buyers for the 12-month period ended March 31st, 2021 were reported at 823.8 million, up 31% from the 628.1 million reported for the same 12-month period of the year prior. Operating loss for the first quarter of 2021 was reported at UDS$633 million, with the non-GAAP operating loss coming in at USD$484.5 million for the quarter.
Costs of Revenue
Total costs of revenues increased by a monumental 487% in the first quarter of the fiscal year 2021, as compared to the numbers reported for the same time period of the prior year. Q1 2021 reported a cost of revenue of USD$1640.2 million. This massive difference is largely attributable to the costs of merchandise sales, increases in the cost of payment processing feed, cloud service fees, and delivery and storage fees.
R&D Expenses
Research and development expenses were up 51% from the first quarter of the fiscal year 2020, with Q1 2021 reporting USD$338.6 million in R&D costs. This significant difference is largely attributable to an increase in the company’s headcount, as well as the recruitment of more experienced R&D personnel. The yearly difference in R&D expenses was also contributed to by an increase in R&D-related cloud services expenses.
Solid Liquidity Position
PDD also reported USD$756.4 million worth of the 0% convertible bonds due in the fiscal year 2024 had been converted into newly issued American Depositary Shares as of April 30th, 2021. As of March 31st, 2021, the company reported cash, cash equivalents, and short-term investments totaling USD$12.7 billion, reflecting a stellar liquidity position.
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Future Outlook for PDD
Armed with a solid liquidity position, PDD is poised to capitalize on the opportunities presented it to usher in further growth. Current and potential investors are hopeful that management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.
