Pinduoduo stock jumps toward a 1-year high after big profit and revenue beats

The U.S.-listed shares of Pinduoduo Inc.
PDD,
+13.76%
shot up 10.1% toward a one-year high in premarket trading Monday, after the China-based mobile marketplace reported third-quarter profit and revenue that rose well above forecasts, as strength in online marketing and transaction services offset some weakness in merchandise sales. Net income climbed to RMB10.59 billion ($1.49 billion), or RMB7.34 a share, from RMB1.64 billion, or RMB1.15 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per American depositary share (ADS) of RMB8.62 beat the FactSet consensus of RMB4.79. Revenue jumped 65.1% to RMB35.50 billion ($4.99 billion), well above the FactSet consensus of RMB30.71 billion. Revenue from online marketing services rose 58% to RMB28.43 billion and from transaction services soared 102% to RMB7.02 billion, while merchandise sales revenue fell 31% to RMB56.4 million. Cost of revenue rose much less than revenue growth, up just 13% to RMB6.56 billion. The stock has rallied 12.8% year to date through Friday, while the iShares China Large-Cap ETF
FXI,
+0.89%
has tumbled 30.8% and the S&P 500
SPX,
-0.45%
has dropped 15.5%.