6-K - PDD - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2022

Commission File Number: 001-38591

Pinduoduo Inc.

28/F, No. 533 Loushanguan Road, Changning District

Shanghai, 200051

People's Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Exhibit Index

Exhibit 99.1—Press Release (Earnings Release)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PINDUODUO INC.
By	:	/s/ Lei Chen
Name	:	Lei Chen
Title	:	Chairman of the Board of Directors and Chief Executive Officer

Date: November 28, 2022

Exhibit 99.1

PDD Announces Third Quarter 2022 Unaudited FinancialResults

SHANGHAI, November 28, 2022 (GLOBE NEWSWIRE) – PDD (the “Company”) (NASDAQ: PDD), today announced its unaudited financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

●	Total revenues in the quarter were RMB35,504.3 million (US$^1^4,991.1<br>million), an increase of 65% from RMB21,505.8 million in the same quarter of 2021.
●	Operating profit in the quarter was RMB10,436.6 million (US$1,467.2 million), an increase of 388%<br>from RMB2,139.3 million in the same quarter of 2021. Non-GAAP^2^operating profit in the quarter was RMB12,301.5 million (US$1,729.3 million), an increase of 277% from RMB3,260.7 million in the same<br>quarter of 2021.
---	---
●	Net income attributable to ordinary shareholders in the quarter was RMB10,588.6 million (US$1,488.5<br>million), an increase of 546% from RMB1,640.0 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary shareholdersin the quarter was RMB12,447.2 million (US$1,749.8 million), an increase of 295% from RMB3,150.2 million in the same quarter of 2021.
---	---

“We continued to deepen our value creation in the third quarter,” said Mr. Lei Chen, Chairman and Chief Executive Officer of PDD. “We will increase our R&D investment to further enhance the supply chain efficiency and agricultural digital inclusion.”

“Investment in certain projects was affected in the third quarter,” said Ms. Jun Liu, VP of Finance of PDD. “We will continue to step up our investment in R&D and create long-term value through innovations.”

^1^ This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.1135 to US$1.00, the noon buying rate in effect on September 30, 2022 as set forth in the H.10 Statistical Release of the Federal Reserve Board.

^2^ The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment. See “Reconciliation of Non- GAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Third Quarter 2022 Unaudited Financial Results

Totalrevenues were RMB35,504.3 million (US$4,991.1 million), an increase of 65% from RMB21,505.8 million in the same quarter of 2021. The increase was primarily due to an increase in revenues from online marketing services and transaction services, offset by the decrease of revenues from merchandise sales.

●	Revenues from online marketing services and others were RMB28,425.6 million (US$3,996.0 million),<br>an increase of 58% from RMB17,946.5 million in the same quarter of 2021.
●	Revenues from transaction services were RMB7,022.3 million (US$987.2 million), an increase of 102%<br>from RMB3,477.1 million in the same quarter of 2021.
---	---
●	Revenues from merchandise sales were RMB56.4 million (US$7.9 million), a decrease of 31% from RMB82.1<br>million in the same quarter of 2021.
---	---

Totalcosts of revenues were RMB7,414.1 million (US$1,042.3 million), an increase of 13% from RMB6,558.6 million in the same quarter of 2021. The increase mainly came from increased fulfillment fees and payment processing fees.

Totaloperating expenses were RMB17,653.6 million (US$2,481.7 million), an increase of 38% from RMB12,807.8 million in the same quarter of 2021.

●	Sales and marketing expenses were RMB14,048.8 million (US$1,975.0 million), an increase of 40%<br>from RMB10,050.6 million in the same quarter of 2021, mainly due to increased spending in promotion and advertising activities.
●	General and administrative expenses were RMB906.6 million (US$127.4 million), an increase of 171%<br>from RMB334.8 million in the same quarter of 2021, primarily due to an increase in staff related costs.
---	---
●	Research and development expenses were RMB2,698.2 million (US$379.3 million), an increase of 11%<br>from RMB2,422.4 million in the same quarter of 2021. The increase was primarily due to an increase in headcount and the recruitment of<br>more experienced R&D personnel.
---	---

Operatingprofit in the quarter was RMB10,436.6 million (US$1,467.2 million), an increase of 388% from RMB2,139.3 million in the same quarter of 2021. Non-GAAP operating profit in the quarter was RMB12,301.5 million (US$1,729.3 million), an increase of 277% from RMB3,260.7 million in the same quarter of 2021.

Netincome attributable to ordinary shareholders in the quarter was RMB10,588.6 million (US$1,488.5 million), an increase of 546% from RMB1,640.0 million in the same quarter of 2021**. Non-GAAP net income attributable to ordinary shareholders** in the quarter was RMB12,447.2 million (US$1,749.8 million), an increase of 295% from RMB3,150.2 million in the same quarter of 2021.

Basicearnings per ADS was RMB8.38 (US$1.18) and diluted earnings per ADS was RMB7.34 (US$1.03), compared with basic earnings per ADS of RMB1.31 and diluted earnings per ADS of RMB1.15 in the same quarter of 2021. Non-GAAP diluted earnings per ADS was RMB8.62 (US$1.21), compared with RMB2.18 in the same quarter of 2021.

Netcash flow provided by operating activities was RMB11,651.8 million (US$1,638.0 million), compared with RMB8,736.6 million in the same quarter of 2021, mainly due to the increase in net income and the changes in working capitals.

Cash,cash equivalents and short-term investments were RMB137.8 billion (US$19.4 billion) as of September 30, 2022, compared with RMB92.9 billion as of December 31, 2021.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 AM U.S. Eastern Time on Monday, November 28, 2022 (8:30 PM Beijing/Hong Kong Time on Monday, November 28, 2022).

The conference call will be webcast live at https://investor.pddholdings.com/investor-events. The webcast will be available for replay at the same website following the conclusion of the call.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating profit and non-GAAP net income attributable to ordinary shareholders, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment.

The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment, which are non-cash charges. The Company also believes that the non-GAAP financial measures could provide further information about the Company’s results of operations, and enhance the overall understanding of the Company’s past performance and future prospects.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company’s non-GAAP financial measures do not reflect all items of income and expenses that affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the Company’s financial information in its entirety and not rely on a single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned “Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Safe Harbor Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China’s and global e-commerce markets; changes in its revenues and certain cost or expense items; the expected growth of China’s and global e-commerce markets; PRC governmental policies and regulations relating to the Company’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

About PDD

PDD is a multinational commerce group that owns and operates a portfolio of businesses. PDD aims to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from the increased productivity and convenience through new opportunities.

For more information, please visit www.pddholdings.com.

For investor and media inquiries, please contact:

investor@pddholdings.com

media@pddholdings.com

PDD

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

	As of
	December<br> <br>31, 2021		September 30, 2022
	RMB		RMB		US
			(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		6,426,715		25,601,547
Restricted cash		59,617,256		48,808,388
Receivables from online payment platforms		673,737		476,329
Short-term investments		86,516,618		112,207,949
Amounts due from related parties		4,250,155		4,680,281
Prepayments and other current assets		3,424,687		1,795,802
Total current assets		160,909,168		193,570,296
Non-current assets
Property, equipment and software, net		2,203,323		1,148,010
Intangible assets		701,220		297,856
Right-of-use assets		938,537		1,235,435
Deferred tax assets		31,504		27,707
Other non-current assets		16,425,966		12,828,680
Total non-current assets		20,300,550		15,537,688
Total Assets		181,209,718		209,107,984

All values are in US Dollars.

PDD

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

	As of
	December<br> <br>31, 2021			September 30, 2022
	RMB			RMB		US
				(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Amounts due to related parties		1,963,007			2,600,563
Customer advances and deferred revenues		1,166,764			1,391,560
Payable to merchants		62,509,714			51,562,514
Accrued expenses and other liabilities		14,085,513			14,242,036
Merchant deposits		13,577,552			15,122,695
Lease liabilities		427,164			512,838
Total current liabilities		93,729,714			85,432,206
Non-current liabilities
Convertible bonds^3^		11,788,907			15,749,603
Lease liabilities		544,263			750,257
Deferred tax liabilities		31,291			46,047
Other non-current liabilities		996			-
Total non-current liabilities		12,365,457			16,545,907
Total Liabilities		106,095,171			101,978,113
Shareholders’ equity
Ordinary shares		161			162
Additional paid-in capital^3^		95,340,819			96,754,398
Accumulated other comprehensive (loss)/ income^3^		(2,519,900	)		4,630,973
Accumulated (deficits)/ surplus^3^		(17,706,533	)		5,744,338
Total Shareholders’ Equity		75,114,547			107,129,871
Total Liabilities and Shareholders’ Equity		181,209,718			209,107,984

All values are in US Dollars.

^3^ The Company adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) on January 1, 2022, using the modified retrospective method with a cumulative-effect adjustment to the opening balance of convertible bonds, additional paid-in capital, accumulated other comprehensive income/ (loss) and accumulated surplus/ (deficits).

PDD

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands of RMB and US$)

	For the three months ended September 30,								For the nine months ended September 30,
	2021			2022					2021			2022
	RMB			RMB			US		RMB			RMB			US
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Revenues		21,505,758			35,504,304					66,719,077			90,737,561
Costs of revenues		(6,558,648	)		(7,414,132	)		)		(25,202,584	)		(22,535,593	)		)
Gross profit		14,947,110			28,090,172					41,516,493			68,201,968
Sales and marketing expenses		(10,050,611	)		(14,048,820	)		)		(33,435,891	)		(36,611,335	)		)
General and administrative expenses		(334,806	)		(906,573	)		)		(1,120,812	)		(2,324,408	)		)
Research and development expenses		(2,422,421	)		(2,698,166	)		)		(6,969,995	)		(7,978,039	)		)
Total operating expenses		(12,807,838	)		(17,653,559	)		)		(41,526,698	)		(46,913,782	)		)
Operating profit/ (loss)		2,139,272			10,436,613					(10,205	)		21,288,186
Interest and investment income, net		631,913			1,092,150					2,147,019			2,645,402
Interest expenses		(298,431	)		(13,646	)		)		(927,886	)		(39,434	)		)
Foreign exchange (loss)/ gain		(10,433	)		53,374					23,645			(125,891	)		)
Other (loss)/ income, net		(52,606	)		546,528					541,169			2,052,533
Profit before income tax and share of results of equity investees		2,409,715			12,115,019					1,773,742			25,820,796
Share of results of equity investees		85,011			10,732					230,148			(76,377	)		)
Income tax expenses		(854,766	)		(1,537,177	)		)		(854,766	)		(3,660,054	)		)
Net income		1,639,960			10,588,574					1,149,124			22,084,365

All values are in US Dollars.

PDD

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands of RMB and US$, except for per share data)

	For the three months ended September 30,					For the nine months ended September 30,
	2021		2022			2021		2022
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Net income		1,639,960		10,588,574			1,149,124		22,084,365
Net income attributable to ordinary shareholders		1,639,960		10,588,574			1,149,124		22,084,365
Earningsper ordinary share:
-Basic		0.33		2.10			0.23		4.38
-Diluted		0.29		1.84			0.20		3.86
Earnings per ADS (4 ordinary shares equals 1 ADS ):
-Basic		1.31		8.38			0.92		17.52
-Diluted		1.15		7.34			0.80		15.43
Weighted average number of outstanding ordinary shares (in thousands):
-Basic		5,021,164		5,051,256			5,006,285		5,043,522
-Diluted		5,703,986		5,776,165			5,715,932		5,733,453

All values are in US Dollars.

PDD

NOTES TO FINANCIAL INFORMATION

(Amounts in thousands of RMB and US$)

	For the three months ended September 30,					For the nine months ended September 30,
	2021		2022			2021		2022
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Revenues
- Online marketing services and others		17,946,496		28,425,645			50,138,401		71,756,721
- Transaction services		3,477,147		7,022,252			9,416,260		18,829,866
- Merchandise sales		82,115		56,407			7,164,416		150,974
Total		21,505,758		35,504,304			66,719,077		90,737,561

All values are in US Dollars.

PDD

NOTES TO FINANCIAL INFORMATION

(Amounts in thousands of RMB and US$)

	For the three months ended September 30,					For the nine months ended September 30,
	2021		2022			2021		2022
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Share-based compensation costs included in:
Costs of revenues		9,089		5,841			20,895		22,011
Sales and marketing expenses		384,704		608,462			1,067,727		1,623,126
General and administrative expenses		156,731		680,252			568,266		1,724,567
Research and development expenses		570,929		570,327			1,625,137		1,862,276
Total		1,121,453		1,864,882			3,282,025		5,231,980

All values are in US Dollars.

PDD

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of RMB and US$)

	For the three months ended September 30,								For the nine months ended September 30,
	2021			2022					2021			2022
	RMB			RMB			US		RMB			RMB			US
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net cash generated from operating activities		8,736,568			11,651,823					12,383,236			21,957,598
Net cash used in investing activities		(13,764,757	)		(356,394	)		)		(22,869,860	)		(13,801,754	)		)
Net cash generated from/ (used in) financing activities		146			258					(1,875,347	)		569
Effect of exchange rate changes on cash, cash equivalents and restricted cash		22,160			250,227					(118,703	)		209,551
(Decrease)/ increase in cash, cash equivalents and restricted cash		(5,005,883	)		11,545,914					(12,480,674	)		8,365,964
Cash, cash equivalents and restricted cash at beginning of period		67,368,845			62,864,021					74,843,636			66,043,971
Cash, cash equivalents and restricted cash at end of period		62,362,962			74,409,935					62,362,962			74,409,935

All values are in US Dollars.

PDD

RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES

(Amounts in thousands of RMB and US$, except for per share data)

	For the three months ended September 30,							For the nine months ended September 30,
	2021		2022					2021			2022
	RMB		RMB			US		RMB			RMB		US
	(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
Operating profit/ (loss)		2,139,272		10,436,613					(10,205	)		21,288,186
Add: Share-based compensation		1,121,453		1,864,882					3,282,025			5,231,980
Non-GAAP operating profit		3,260,725		12,301,495					3,271,820			26,520,166
Net income attributable to ordinary shareholders		1,639,960		10,588,574					1,149,124			22,084,365
Add: Share-based compensation		1,121,453		1,864,882					3,282,025			5,231,980
Add: Interest expense related to convertible bonds’ amortization to face value and gain or loss on extinguishment, net		298,443		13,646					915,917			39,434
Add: Loss/ (gain) from fair value changes of long-term investments		90,300		(19,886	)		)		38,064			68,173
Non-GAAP net income attributable to ordinary shareholders		3,150,156		12,447,216					5,385,130			27,423,952
Non-GAAP diluted weighted-average number of ordinary shares outstanding (in thousands)		5,767,207		5,776,165					5,789,157			5,733,453
Diluted earnings per ordinary share		0.29		1.84					0.20			3.86
Add: Non-GAAP adjustments to earnings per ordinary share		0.26		0.31					0.73			0.92
Non-GAAP diluted earnings per ordinary share		0.55		2.15					0.93			4.78
Non-GAAP diluted earnings per ADS		2.18		8.62					3.72			19.13

All values are in US Dollars.