PDD HOLDINGS INC First Take: 1Q26 results – Revenue miss on ads deceleration; Bottom line dragged by below-the-line losses

Research evidence excerpt

PDD HOLDINGS INC First Take: 1Q26 results – Revenue miss on ads deceleration; Bottom line dragged by below-the-line losses

Asia Pacific Equity Research

27 May 2026

Neutral

PDD HOLDINGS INC PDD, PDD US

Price: $96.64

First Take: 1Q26 results – Revenue miss on ads 26 May 2026

deceleration; Bottom line dragged by below-the-line Price Target: $110.00

losses PT End Date: 31 Dec 2026

Our First Take: PDD reported 1Q26 results that came in mixed versus Head of China Equity Research

expectations, with both the top line and bottom line missing consensus. and Co-Head of Asia TMT

Adjusted operating profit grew 16% yoy, translating into an adj. OPM of Research

20% (+1ppt yoy, though 1ppt below JPMe), indicating that core operating Alex Yao AC

efficiency held up reasonably well. However, adjusted net profit of (86 21) 6106 6505

alex.yao@jpmorgan.com

Rmb14bn missed both JPMe and consensus by 43%, with adj. net margin SAC Registration Number: S1730523020001

of 13.2% down 4ppts yoy and 9ppts behind expectations – the shortfall Nancy Liu

was driven primarily by larger-than-expected losses below the line, (86 21) 6106 6343

including Rmb632mn of interest and investment losses and Rmb2bn of nancy.liu@jpmorgan.com

other losses. We expect Bloomberg consensus estimates for both the top SAC Registration Number: S1730524090001

line and the bottom line to be revised downward post-print. J.P. Morgan Securities (China) Company Limited

Key Positives

• Transaction services revenue grew 20% yoy to Rmb56bn during the

quarter, 1% ahead of consensus estimates.

Key Negatives/Question Marks

• 1Q26 revenue came in at Rmb106bn, up 11% yoy but still 3%/2%

behind JPMe/consensus estimates. Online marketing services revenue

decelerated further to 2% yoy, from MSD last quarter, 4%/5% behind