PDD, the parent company of e-commerce platform Temu, released its unaudited fourth-quarter financial results on Thursday, reporting total revenue of RMB 110.61 billion ($15.3 billion), up 24% from RMB 88.9 billion ($12.27 billion) in the same quarter of 2023. Despite the growth, the company missed market estimates.

Why it matters: PDD’s slowing growth highlights the challenges of sustaining rapid expansion in a highly competitive e-commerce market. The company also faces increasing regulatory uncertainties overseas, with potential policy shifts that could affect Temu’s global operations.

Details: PDD Chairman and Co-CEO Chen Lei addressed concerns over policy risks, such as tariffs, that Temu faces overseas. During the earnings call, he noted that the external environment is changing at an accelerated pace, competition remains intense, and macro policies related to Temu’s business could also shift.

• PDD’s revenue from online marketing services and other streams in Q4 was RMB 57.01 billion ($7.87 billion), up 17% year over year. However, this growth rate slowed compared with the previous quarter, when online marketing and other service revenue increased by 24%.
• Revenue from transaction services reached RMB 53.6 billion ($7.39 billion), up 33% from a year ago, but this was a significant slowdown from the 72% year-over-year growth recorded in the prior quarter.
• These figures indicate that while PDD maintained growth, the company’s advertising and commission revenue saw a deceleration even during the traditional peak season for e-commerce sales.
• PDD’s total cost of revenue for Q4 was RMB 47.8 billion ($6.59 billion), up 36% year over year, mainly due to higher fulfillment and payment processing fees.
• Total operating expenses in Q4 rose 19% year over year to RMB 37.22 billion ($5.14 billion), driven by increased sales and marketing expenses.
• So far this year, US-listed PDD’s stock has risen 29.74%. As of market close on March 19 (Eastern Time), the company’s shares were trading at $125.92 per share.

Context: In February, PDD’s e-commerce platform Temu began preparations to enter the South Korean market and build a logistics network.

Investment bank and financial services company Morgan Stanely has increased Alibaba Cloud’s (阿里云) valuation from $39 billion to $68 billion. It said it expects the cloud computing company’s revenue to reach $28.5 billion in 2024.

According to reports, the company is the third biggest cloud solutions provider globally, falling just behind Amazon and Microsoft. However, at home, it commands 47.5% of the market.

The company’s financial results have been driving Wall Street’s optimism. Alibaba Cloud reported revenue of RMB 13.39 billion for FY2018, exceeding analysts’ expectations. Morgan Stanley has set the company’s expected 2024 revenue to $28.5 billion.

In a recent earnings conference call, executives said the company has its sights on the international market, hoping to challenge Amazon and Microsoft. In March, it opened its first data center in Indonesia.

The company is also looking to provide innovative computing solutions. In 2017, it launched 316 products and features, 60 of which were focussed on high-value fields, including artificial intelligence.

The company also piloted its smart city project in Hangzhou in 2017. Dubbed City Brain, it aimed to leverage its AI, deep learning and data analytics capabilities to perform real-time traffic prediction. It later launched its Malaysian City Brain initiative in January 2018.

Alibaba Cloud is also banking heavily on the internet of things (IoT). At the 2018 Cloud Computing Conference in Shenzhen, the company said it aspired to connect 10 billion devices by 2023. These include both devices in homes and connected cars.

Correction: The article originally indicated Alibaba Cloud reported a 2018 Q1 revenue of RMB 13.39 billion. This was later changed to a revenue of RMB 13.39 billion for FY2018. 

Chinese microblogging platform Weibo has reported a 111% year-on-year increase in profit while adding 70 million monthly users, local media is reporting.

The NASDAQ-listed company released its 2018 Q1 unaudited financial results on May 9, displaying a net profit of $99.1 million. The company’s revenue increased by 76% compared to this time last year, rising from $199.2 million to $349.9 million.

Weibo said that as of March 2018 it had a total of 411 million monthly active users (MAU), more than half of China’s internet population. Of these, 93% use mobile devices to access the network. Average daily users increased to 184 million, up 30 million compared to 2017 Q1.

Advertising and marketing drove the company’s increase in revenue, making $277.6 million from SMEs and large companies.

Weibo expects its Q2 revenue to reach up to $430 million.

The social network was recently embroiled in controversy. In April 2018, it announced plans to purge any homosexually-themed content as part of a “clean-up” of its platform. The move came amid a crackdown on “inappropriate” content by China’s media regulator. The statement sparked outcry online, causing the hashtag “I am gay” to go viral before being banned. The company eventually reversed its decision, saying it would only be targeting violent and vulgar content.