Temu-Owner PDD beats profit estimates as revenue growth slows to 8%

PDD Holdings posted adjusted quarterly earnings of 19.33 yuan per share against estimates of 18.51, with revenue up 8% to 112.4bn yuan, or $16.6bn, missing forecasts. Shares rose about 3.5% premarket as European regulatory pressure on Temu continues to build.

Temu’s owner made more money than analysts expected and sold less than they hoped. PDD Holdings reported adjusted earnings of 19.33 yuan per American depositary receipt against an estimate of 18.51, on revenue up 8% to 112.4bn yuan, or $16.6bn, which missed forecasts.

Investors took the profit. The shares rose about 3.5% in premarket trading in New York.

The shape of that result is discipline rather than expansion. Single-digit revenue growth is a long way from the pace PDD ran at while Temu was pushing into Europe and the United States.

The company also had something to say about regulators. “We view compliance as a fundamental priority and are fully committed to safeguarding consumer rights and building lasting trust,” said co-chief executive Jiazhen Zhao.

That sentence is carrying weight. Temu is dealing with at least three separate European processes, of which the most publicised is the €200mn the Commission fined it in May over unsafe baby toys and faulty chargers.

The newer one is less understood. In July the Commission sent Temu a Statement of Grounds alleging it failed to cooperate with an unannounced inspection at its Dublin subsidiary the previous December.

This is not the Digital Services Act. It falls under the Foreign Subsidies Regulation, and the investigation underneath it is into whether Temu has received distortive Chinese state subsidies.

The exposure there is larger than anything already paid. Article 17 allows fines of up to 1% of total turnover in the preceding business year, at a company that books $16.6bn in a single quarter.

Nor is €200mn the ceiling under the other regime. The Commission has since issued AliExpress a €550mn DSA penalty, more than twice Temu’s.

Temu rejects the obstruction claim categorically. It says it cooperated fully with every request during the inspection and generates sustained cash flow from its own operations without unfair subsidies.

The quarter that will actually test Europe is the one running now. The EU’s €150 duty exemption for low-value imports ended on 1 July, replaced by a €3 charge per item, and none of that appears in these numbers.