(Yicai) March 21 -- Shares of PDD Holdings jumped after the Chinese owner of discount shopping sites Pinduoduo and Temu reported soaring profit for the fourth quarter and whole of last year, driven by a shift toward premium consumer goods and year-end promotions.

PDD [NASDAQ: PDD] closed 3.5 percent higher at USD132.17 a share in New York yesterday, after earlier jumping by as much as 15.6 percent. PDD reached a milestone last November, when its market capitalization surpassed that of Alibaba Group Holdings.

Net income climbed 90 percent to CNY60 billion (USD8.5 billion) in 2023 and 146 percent to CNY23.3 billion in the December quarter, the Shanghai-based company said in a financial report yesterday.

Annual revenue rose 90 percent to CNY247.6 billion (USD34.4 billion), mainly on growth in income from online market and transaction services, which climbed 49 percent and 241 percent to CNY153.5 billion and CNY94.1 billion, respectively. Quarterly revenue rose 123 percent to CNY88.9 billion.

“2023 represents a pivotal chapter in our corporate history as we transition towards high-quality development,” said Chen Lei, chairman and co-chief executive officer. Commenting on the fourth quarter, co-CEO Zhao Jiazhen noted that PDD “saw growing demand driven by encouraging consumer sentiment.”

Annual sales and marketing expenses jumped 51 percent to CNY82 billion, mainly due to higher spending on promotions and advertising, while they rose 50 percent to CNY26.6 billion in the final quarter for the the same reasons.

Research and development spending topped CNY10 billion for the second consecutive year, “underscoring our dedication to technology and agricultural advancements,” said Liu Jun, finance vice president.

Chen added that this year PDD remains “dedicated to further improving consumer experiences, enhancing technology innovations, and generating positive impacts in our communities.”

Temu, PDD’s overseas e-commerce platform, has expanded its presence worldwide to cover 50 countries and regions since its launch in September 2022, Chen pointed out. 

Temu contributed 23 percent to PDD's annual revenue, which will increase to 43 percent this year and over 50 percent next year, according to HSBC Global Research. Its gross merchandise value will likely double to about USD48 billion in 2024 and reach USD140 billion by 2027. 

But the platform relies heavily on the US market, which accounts for 60 percent of its sales, and PDD intends to reduce that to as little as 30 percent by next year, according to analysts, who cited two people briefed by executives at the company.

PDD is increasing investment in Europe, Asia, Africa, the Middle East, and South America, Chen said, and aims to strengthen Temu's compliance with overseas laws and regulations.

Editor: Martin Kadiev