Pinduoduo Earnings Call: "Reinvesting in Supply Chains to Recreate Pinduoduo in Three Years," Profit Margin Volatility to Be the Norm

Pinduoduo's fourth quarter and full-year revenue for 2025 maintained steady double-digit growth. However, amidst fierce industry competition and a complex global regulatory environment, the company explicitly announced its proactive sacrifice of short-term profits, positioning itself to "All in" with a heavy investment in supply chains, aiming to "recreate Pinduoduo" in the next three years.

Tonight, core management including Co-Chairmen and Co-CEOs Chen Lei and Zhao Jia Zhen, along with CFO Li Jiong, attended the subsequent earnings call. During the hour-long exchange, Pinduoduo's management provided a clear strategic direction in response to market concerns regarding slowing growth, profit margin volatility, and the compliance of global operations.

As of press time, Pinduoduo's US-listed shares were up 1.91% in pre-market trading.

Steady Revenue but Net Profit Decreased Year-on-Year, "Giving Back to the Ecosystem" is the Main Theme

In terms of core financial data, Pinduoduo's revenue continued to grow steadily. In the fourth quarter of 2025, the Group's total revenue reached RMB 123.9 billion, a year-on-year increase of 12%; for the full year 2025, total revenue reached RMB 431.8 billion, a year-on-year increase of 10%. Among these, transaction service revenue in the fourth quarter was particularly strong, reaching RMB 63.9 billion, a 19% increase year-on-year.

However, contrasting with revenue growth, the Group's net profit for both the quarter and the full year saw a year-on-year decrease. Regarding this highly sensitive profit metric, Co-CEO Zhao Jia Zhen provided a direct response. He explicitly pointed out that the decline in profit was primarily due to the company's continuous investment in both supply and demand sides. Zhao Jia Zhen stated on the call:

"As we have emphasized multiple times, compared to short-term performance, we are more focused on giving back to the ecosystem for its long-term value."

He revealed that the company launched a 100-billion-level merchant support strategy for the first time in the e-commerce industry and subsidized the second-stage transit fees for "delivery to village" orders, bringing more remote villages into the free shipping zones. These substantial investments directly impacted current profit performance.

Focusing on Core Business: No Diversification Pursued, "Recreating Pinduoduo"

As the e-commerce industry's overall growth slows and enters a new phase of a zero-sum game for market share, where does Pinduoduo's future growth potential lie? Management's answer is not blind expansion, but rather a deeper internal focus.

At this meeting, Zhao Jia Zhen made a highly impactful strategic declaration:

"In the next phase, the company's strategic focus will not be business diversification, but rather on the high-quality development of supply chains. We will continue to leverage our long-term accumulated advantages in supply chains to achieve a platform rebirth. ...We believe that in the next three years, we will have the opportunity to recreate Pinduoduo."

He further added: "Heavily investing in supply chains to recreate Pinduoduo is our fundamental duty." To achieve this goal, Pinduoduo has launched special initiatives such as "Duoduo Good Specialties" and "New Quality Supply," shifting from simple traffic tilting to supporting the entire lifecycle of product research and development, manufacturing, and sales.

Directly Addressing Globalization Challenges: Compliance is the Bottom Line, External Environment Brings Greater Uncertainty

Regarding the regulatory storm faced by Pinduoduo's global operations (such as Temu) overseas, Co-CEO Chen Lei did not shy away. He admitted that as the global political landscape becomes more complex, trade, tax, and data regulations in different countries and regions continue to evolve, posing greater challenges to global operations.

"We have indeed received inquiries from some regulatory bodies recently," Chen Lei stated:

"As our business scales and regulatory environments change rapidly across regions, we deeply understand that compliance is the bottom line. ... This inevitably brings us greater challenges and uncertainties, and will affect or even reshape our development model."

To cope with this uncertainty, Chen Lei pointed out that the company's strategic focus remains on investing in supply chain capabilities, empowering merchants and manufacturers to build direct-to-market capabilities, and adapting to changes in global trade policies through flexible model iteration.

Performance Guidance: Intensifying Competition, Fluctuations and Volatility in Profit Margins Will Be the "Norm"

Regarding the future profit margin trend, which investors are most concerned about, Pinduoduo's management managed expectations, clearly dispelling the market's expectation of continuously high profit margins.

Zhao Jia Zhen frankly stated:

"The time mismatch between investment and return will inevitably have a direct impact on our performance in specific periods. ... As we continue our strategic investments, coupled with the current complex and volatile macroeconomic environment, the company's future profit margins will continue to fluctuate between different quarters, and this will become the norm."

Chen Lei also made a grim prediction for the 2026 market environment:

"Since the beginning of 2026, competition in the e-commerce industry has continued to intensify, revolving around new business models and technologies. ... This will inevitably bring more challenges and pressure to our future performance, impacting our profitability and growth."

Management strongly advised the market to adjust its evaluation metrics, urging investors "not to focus too much on single-quarter profit margin metrics, but rather to focus more on the high-quality development of our platform ecosystem."

The full transcript of the call is as follows:

Moderator

I'd like to introduce our Co-Chairman and Co-CEO, Zhao Jia Zhen, to start us off.

Zhao Jia Zhen

Hello everyone, I'm Zhao Jia Zhen. Thank you for joining our Q4 2025 and full-year earnings release.

Moderator

Hello everyone, thank you for joining our Q4 and FY2025 earnings call.

Zhao Jia Zhen

2025 marks the tenth year of Pinduoduo's founding and the year with the largest investment in the platform's high-quality development. We launched a 100-billion-level merchant support strategy for the first time in the e-commerce industry. The entire company has been fully committed to elevating farmer and merchant support to a new level. At the year-end shareholder meeting, we upgraded the company's governance structure, implemented a Co-Chairman system, and further elevated the company's strategic focus to heavily investing in supply chains. Focusing on the high-quality, brand-oriented development of supply chains to achieve a value leap in the entire supply chain system.

Zhao Jia Zhen

Our performance remained steady over the past year. In this quarter, Group revenue was RMB 123.9 billion, a 12% increase year-on-year. For the full year, Group revenue was RMB 431.8 billion, a 10% increase year-on-year. Both quarterly and full-year net profits decreased year-on-year, mainly due to our continuous investment in both supply and demand sides. As we have emphasized multiple times, compared to short-term performance, we are more focused on giving back to the ecosystem for its long-term value.

Zhao Jia Zhen

Benefiting from the 100-billion-level support policy, the continuous investment in both supply and demand sides and the platform and industrial ecosystem have achieved steady progress. Supply chain systems such as agricultural producing areas and industrial belts have become key pillars supporting the platform and ecosystem, bringing more affordable and high-quality goods to consumers.

Zhao Jia Zhen

Under the continuous investment of the 100-billion-level support, special initiatives like "Duoduo Good Specialties," "New Quality Supply," and "E-commerce Westward Expansion" continue to advance. The scope of supply chain support has expanded from leading merchants and small and medium-sized merchants to all aspects of the industrial chain, assisting merchants in various categories to achieve differentiated development, completing the leap from category, quality to brand, significantly improving supply chain efficiency and the comprehensive capabilities of the industry, and creating more profit and innovation space for agricultural producing areas and industrial belts.

Zhao Jia Zhen

In the fourth quarter, the "Duoduo Good Specialties" special team delved into agricultural producing areas such as Anyue Lemons, Pu'er Coffee, Wuhan Peanuts, Meizhou Pomelos, Wenshan Blueberries, Fuzhou Abalone, and Lianyungang Seaweed. Through customized support with a "one product, one plan" approach, they addressed issues such as the lack of standardization and low added value of fresh produce, guiding agricultural producing areas towards standardized planting, high-quality product development, and deep processing for sales. This effectively increased the added value of agricultural products, retained more profits in the origin, and further promoted the long-term development of specialty agricultural industries.

Zhao Jia Zhen

Industrial Belts. In industrial belts, the cultivation and acceleration of "New Quality Supply" are also continuously speeding up. Our special teams have visited manufacturing clusters such as Yiwu Accessories, Pinghu Down Jackets, Hunan Spicy Strips, Anhui Fried Snacks, Tianjin Potato Chips, Jiangsu-Zhejiang Small Appliances, and Shanghai Chocolates, and have delved into every link of the supply chain, including raw materials and components. Through a dual approach of fee reduction and support, we have further unleashed supply chain advantages, promoted the overall upgrade of supply chain operating models, and helped industrial belts move away from homogenization.

Zhao Jia Zhen

While heavily investing in supply chains, we are also activating consumption potential in remote areas through "E-commerce Westward Expansion," actively developing new incremental business for merchants. In the fourth quarter, building on the achievements of "E-commerce Westward Expansion," we continued to tackle the last mile of express delivery to villages in multiple provinces and cities across the country, extending the inclusive benefits of new e-commerce from western regions to vast rural areas. As of now, we have established a network of last-mile distribution bases in over 10 provinces and cities nationwide, including county-level transit warehouses and village collection points. We also subsidize the second-stage transit fees for "delivery to village" orders, bringing more remote villages into the free shipping zones.

Zhao Jia Zhen

In platform governance, we continuously improve the consumption and operating environment of the platform, further enhancing user and merchant service experiences. During the Spring Festival, the platform intensively launched multiple food safety governance measures, primarily including the review of business qualification compliance, food advertising governance, food live streaming control, protection of minors, intellectual property protection, and food database construction, comprehensively safeguarding consumers' daily necessities and New Year's Eve dinners.

Zhao Jia Zhen

In global e-commerce operations, despite drastic external environmental changes, our global e-commerce business has maintained steady development over the past year, which is a testament to our long-term advantage in supply chain accumulation. At the previous shareholder meeting, we announced our full commitment to supply chain upgrades and the goal of heavily investing in supply chains to recreate Pinduoduo, which is our fundamental duty. In the past few months, the major three-year strategy we announced at the shareholder meeting has been translated into concrete actions, and profound changes are occurring within the business and organization. In the next phase, the company's strategic focus will not be business diversification, but rather on the high-quality development of supply chains. We will continue to leverage our long-term accumulated advantages in supply chains to achieve a platform rebirth, driving a value leap in the supply chain system.

Zhao Jia Zhen

2026 marks the 11th year since Pinduoduo's establishment and a new starting point as we move towards the next decade. We are setting off anew, with an "all in" attitude and a spirit of perseverance, to embark on a new journey. We will invest more human and financial resources, continue to heavily invest in supply chains, and increase our commitment to supply chain upgrades and rebirth. We believe that in the next three years, we will have the opportunity to recreate Pinduoduo.

Zhao Jia Zhen

Now I'll hand over the microphone to Chen Lei, who will introduce further.

Chen Lei

Thank you, hello everyone. 2025 is our tenth anniversary. As Jia Zhen mentioned, over the past year, we have fulfilled our corporate responsibilities by launching a 10 billion yuan support plan to give back to the merchant ecosystem. We have also established a Co-Chairman system to further improve governance and firmly anchored the company's strategic focus on the high-quality development of supply chains. Through these efforts, we continue to create long-term value for customers, merchants, the industry, and society. It has been nearly a year since we launched the 10 billion yuan support plan. During this period, we have continuously reinvested in the ecosystem through measures such as fee reductions, merchant support, and food safety initiatives. Our specialized teams have delved into agricultural producing areas and manufacturing clusters, helping hundreds of regions establish standardized production systems and explore differentiated and branded development models. These efforts have significantly improved the efficiency and quality of industrial chain operations, promoting the transformation of supply chains from scale-driven to value-driven. This has also brought more high-quality, affordable products to our consumers. Our continuous investment in supply chains has unleashed strong consumption demand on the platform. The platform performed strongly during major promotional periods such as 618, Double 11, and the Spring Festival. High-quality products from different producing areas have crossed geographical boundaries, offering consumers more diverse choices and further enhancing their quality of life.

Chen Lei

Our global e-commerce business continues to achieve steady growth, reaching considerable scale in most countries. Within three years, we have accomplished what took Pinduoduo a decade domestically. However, over the past year, the global political landscape has become more complex. Trade and regulatory policies in different countries and regions have continued to evolve. This has brought greater uncertainty to our global operations and will affect or even reshape our development model. In this context, we need to rely on the collective capabilities of our supply chain ecosystem more than ever before. Therefore, we will continue to deepen our investment in supply chain capabilities and devote more energy, capital, and resources to its transformation. Our goal is to empower our merchants and manufacturers, enabling them to become innovators with direct-to-market capabilities, to understand consumer needs, conceive products, build brands, and thus drive towards high-quality, brand-oriented growth, creating real value for consumers.

Chen Lei

In the past few months, we have made steady progress in executing the three-year strategy approved at our shareholder meeting. We are pleased to see some results in the fourth quarter. Our local investments in agricultural research have yielded new results. Last October, for the second consecutive year, we were invited to participate in the UN Food and Agriculture Organization's World Food Forum, representing Asian enterprises to share our experiences and achievements in supporting digital agriculture innovation. We also sponsored two agricultural research teams to take the stage at the forum, injecting new vitality into agricultural R&D. Since the beginning of 2026, competition in the e-commerce industry has continued to intensify, focusing on new business models and technologies. Meanwhile, the global environment is more complex than last year, with increased uncertainty in the economic and trade environment, as well as regulatory policies in various countries and regions. This will inevitably bring more challenges and pressure to our future performance, impacting our profitability and growth. However, we will continue to uphold a long-term perspective, faithfully execute our strategy of deeply cultivating supply chains, and invest more resources to give back to the industry and society. Now, I will hand the call over to Li Jiong, who will present our financial performance for FY2025.

Li Jiong

Okay, thank you, Lei. Hello everyone, I'm Li Jiong. Let me walk you through our financial performance for the fourth quarter and fiscal year ended December 31, 2025. On the income statement, for the fourth quarter, our total revenue increased by 12% year-on-year to RMB 123.9 billion, and for the full year 2025, total revenue increased by 10% year-on-year to RMB 431.8 billion. This was primarily driven by the increase in revenue from online marketing services and transaction services.

Li Jiong

Revenue from online marketing services and other for the quarter was RMB 60.0 billion, an increase of 5% compared to the fourth quarter of 2024. Our transaction services revenue for the quarter was RMB 63.9 billion, an increase of 19% compared to the fourth quarter of 2024. Moving on to costs and expenses, our cost of revenues increased by 15% to RMB 55.2 billion in the quarter from RMB 47.8 billion in the fourth quarter of 2024.

Li Jiong

For the full year, our cost of revenues increased by 23% to RMB 188.8 billion, mainly due to increases in fulfillment costs, bandwidth and server costs, and payment processing fees.

Li Jiong

On a GAAP basis, total operating expenses for the quarter increased by 10% to RMB 41.0 billion from RMB 37.2 billion in the fourth quarter of 2024. On a non-GAAP basis, total operating expenses for the quarter increased to RMB 39.3 billion from RMB 35.1 billion in the fourth quarter of 2024. For the fourth quarter, non-GAAP total operating expenses represented 32% of revenue. For the full year 2025, non-GAAP total operating expenses were RMB 140.7 billion, compared to RMB 122.0 billion in 2024. Looking at specific expense items, non-GAAP sales and marketing expenses for the quarter were RMB 34.0 billion, an increase of 9% compared to the fourth quarter of 2024. On a non-GAAP basis, sales and marketing expenses as a percentage of revenue were 27% for the quarter, compared to 28% in the fourth quarter of 2024. For the full year, non-GAAP sales and marketing expenses increased to RMB 123.3 billion in 2025 from RMB 109.1 billion in 2024.

Li Jiong

Non-GAAP general and administrative expenses for the fourth quarter were RMB 0.907 billion, compared to RMB 0.998 billion in the fourth quarter of 2024. For the full year 2025, non-GAAP general and administrative expenses were RMB 3.2 billion, compared to RMB 2.8 billion in the prior year. R&D expenses for the fourth quarter were RMB 4.4 billion on a non-GAAP basis and RMB 5.0 billion on a GAAP basis.

Li Jiong

On a GAAP basis, operating income for the quarter was RMB 27.7 billion, compared to RMB 25.6 billion in the fourth quarter of 2024. Non-GAAP operating income was RMB 29.5 billion, compared to RMB 28.0 billion in the fourth quarter of 2024. Non-GAAP operating margin was 24% for the quarter, compared to 25% in the fourth quarter of 2024. For the full year, non-GAAP operating income was RMB 102.6 billion, compared to RMB 118.3 billion in 2024. Net income attributable to ordinary shareholders was RMB 24.5 billion for the quarter and RMB 99.4 billion for the full year. In the fourth quarter, basic earnings per ADS was RMB 17.50 and diluted earnings per ADS was RMB 16.51, compared to RMB 19.76 for basic and RMB 18.53 for diluted in the fourth quarter of 2024.

Li Jiong

Non-GAAP net income attributable to ordinary shareholders for the fourth quarter was RMB 26.3 billion and RMB 107.3 billion for the full year.

Li Jiong

For the fourth quarter, non-GAAP diluted earnings per ADS was RMB 17.69, compared to RMB 20.15 in the fourth quarter of 2024. This concludes the income statement portion. Now, let me talk about cash flow. Net cash flow from operating activities was RMB 24.1 billion for the fourth quarter and RMB 106.9 billion for the full year 2025, compared to RMB 29.5 billion for the fourth quarter of 2024 and RMB 121.9 billion for the full year 2024. As of December 31, 2025, the company had RMB 422.3 billion in cash, cash equivalents, and short-term investments. Thank you, this concludes my prepared remarks. Thank you, Joey.

Moderator

Next, we will open the floor for questions. For the Q&A session today, Lei and Jia Zhen will answer questions from online analysts. Each analyst will have a maximum of two questions. Lei and Jia Zhen will answer in Chinese and have translation assistance. Operator, we are ready to take questions.

Operator

Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star one on your telephone keypad and await your turn to be announced. If you wish to cancel your request, please press the pound key. Please limit yourself to two questions per participant at a time. Your first question comes from Malaysia Yap from Citi Bank.

Malaysia Yap

Hello, thank you. Good evening, management. Thank you for taking my questions. I have two. First, the company made some organizational adjustments at the shareholder meeting at the end of last year. We see that the company is currently operating in over 90 markets and is facing new challenges from a complex regulatory environment. How will management maintain team agility and execution capabilities in such an environment? Second, in the past quarter, we saw a slowdown in e-commerce platform growth, and the company's advertising revenue growth has also slowed down in the past two quarters. Could management share their views on the current Chinese e-commerce market, and where the industry's next phase of growth might come from? I will translate it myself. I have two questions. First, the company made some organizational adjustments at the shareholder meeting at the end of last year. Currently, the company operates in over 90 markets and is also facing new challenges from a complex regulatory environment. So, how will the company maintain flexibility and execution capabilities in such an environment? Second, in the past quarter, we saw a slowdown in the growth of Chinese e-commerce platforms, and the company's online marketing revenue growth has also shown signs of slowing down in the past two quarters. So, could management share their views on the current state of the Chinese e-commerce market? And where might the industry's next phase of growth come from? Thank you.

Zhao Jia Zhen

Hello, I'm Zhao Jia Zhen, and I will answer the first question. In the past few years, our global business has indeed made breakthrough progress, covering nearly a hundred markets and achieving a certain scale.

Zhao Jia Zhen

In this process, our corporate governance and internal talent growth have not kept pace with business development, leading to strain in many areas. The current international geopolitical changes are rapid, and trade and regulatory policies in various regions are changing quickly and becoming stricter, which also places new demands on our company as a whole.

Zhao Jia Zhen

Therefore, we believe there is both an opportunity and a necessity for a systematic, structural re-creation of our organizational culture and corporate governance. This will certainly take time. In December last year, we announced the Co-Chairman system and the appointment of new leaders at the shareholder meeting, marking the beginning of this systemic reform.

Zhao Jia Zhen

In the coming period, we will invest greater effort, finances, and resources into the upgrade and rebirth of our supply chains, achieving an overall upgrade of our supply chain operating model.

Zhao Jia Zhen

I will also answer your second question. Indeed, as you mentioned, in the past few quarters, we have seen the e-commerce industry enter a phase of intensified competition and slowing growth. In this new phase, we propose heavily investing in supply chains, recognizing that e-commerce platforms should not be simple transaction platforms but can and should do more to create value for all participants in the entire supply chain.

Zhao Jia Zhen

Heavy investment in supply chains covers multiple aspects. In the past period, we launched "Duoduo Good Specialties" and "E-commerce Westward Expansion," which are inclusive projects initiated around empowering supply chains. Here, I would like to highlight two special initiatives.

Zhao Jia Zhen

The first is free delivery to villages. This is a new project we piloted in the fourth quarter of last year. The initial goal was to address the challenge of high logistics costs and low merchant willingness to ship to remote administrative villages. We aim to include more remote villages in the free shipping zones. Currently, Pinduoduo has established county-level transit warehouses and village-level collection points in multiple locations nationwide, and the platform will bear the second-stage transit fees for "delivery to village" orders.

Zhao Jia Zhen

Once delivered to the transit warehouse, the warehouse will complete the transportation from the warehouse to the village collection point. Based on existing experience, the platform is extending the segmented transportation and transit consolidation model to the last mile to villages, optimizing the shopping experience in remote areas and helping merchants open up these markets.

Zhao Jia Zhen

The second is the "New Quality Supply" platform. For high-quality merchants willing to improve quality and services, we assist them in upgrading throughout the entire lifecycle of research and development, production, and sales through industry insights and supply chain collaboration, promoting the reshaping of the supply chain system.

Zhao Jia Zhen

There is much the platform can do here. For example, in product research and development, traditional new product R&D often involves an element of luck. However, within the platform's current ecosystem, key product information is integrated by our merchant acquisition team and promptly relayed to merchants. Through traffic support, new products are tested, helping merchants iterate on products with targeted efforts.

Zhao Jia Zhen

These are two specific examples of our supply chain upgrade and rebirth. Facing slowing industry growth and intensifying competition, we have actively chosen to invest resources in the construction of high-quality supply chains. The platform's solid investment in underlying capabilities such as "New Quality Supply" and "Delivery to Village" will become the driving force for the company's sustained healthy growth in the next decade.

Moderator

Operator, we are ready for the next analyst question.

Operator

Your next question comes from Kenneth Long from UBS. Please proceed.

Kenneth Long

Thank you to management for taking my questions. I have two. First, the company has experienced considerable volatility in its globalization efforts, and starting last year, we've seen high-profile regulatory investigations in some key markets, as well as significant changes in trade policies relevant to the company's business. Could management share their current views on the external environment and where the strategic focus for the company's global business will lie within this context? Second, regarding profit margins, the company's profit margins have indeed fluctuated in recent quarters. Could management share insights into the impact of the different business models the company has launched recently on our profit margins, and how we should think about the company's long-term profit margin levels? I will translate specifically.

Chen Lei

Hi Kenny, I'm Chen Lei, and I will answer your first question. In the past period, we have indeed received inquiries from some regulatory bodies. As our global business develops rapidly, we have achieved a certain scale in various countries. The accompanying scrutiny, concerns, and stricter examination are understandable.

Chen Lei

However, our management believes that the current regulatory rectification lays a good foundation for the next stage of growth and also guides our model iteration in this rapidly changing international political and policy environment. Since our global business began, we have always adhered to a philosophy of long-termism. Based on our supply chain foundations, we are committed to achieving sustainable development in each market. We aim to create real value for consumers.

Chen Lei

As our business scales and regulatory environments change rapidly across regions, we deeply understand that compliance is the bottom line. As an enterprise operating within local communities, we believe we must meet local needs, return to our original intentions, and fulfill our responsibilities. Contributing to the societies in which we operate is the fundamental responsibility of an e-commerce platform. Therefore, our management team has devoted significant effort to business compliance.

Chen Lei

However, we also observe that regulatory frameworks, including trade policies, tax laws, data regulations, and product compliance requirements in various countries and regions, are undergoing significant changes. These requirements are often highly diverse and sometimes contradictory, inevitably bringing us greater challenges and uncertainties.

Chen Lei

We are actively learning, adapting to these changes, and continuously improving our compliance capabilities to create sustainable value for society.

Chen Lei

You also mentioned changes in global trade policies. Since the beginning of last year, we have indeed seen some changes in trade policies in many major markets. While ensuring business compliance, the team has rapidly iterated our business models based on the regulatory environment and market conditions in different regions to provide reliable services to consumers. This is closely related to the supply chain capabilities we have accumulated over the years.

Chen Lei

Therefore, looking ahead, the strategic focus of our company's global business will remain on investing in supply chain capabilities. Every link directly impacts the consumer shopping experience, and consequently, this will be the focus of our investment.

Zhao Jia Zhen

Hello, I'm Zhao Jia Zhen, and I will answer your second question. First, I want to clarify that the company is still in a strategic investment phase. The external environment and competitive landscape are changing rapidly. To meet consumers' evolving needs, we are closely collaborating with merchants on the platform to continuously explore and launch business models that can adapt to the new environment. Any new model, from its inception to full rollout, requires the platform to make decisive resource investments in the early stages.

Zhao Jia Zhen

Whether it is the exploration of new business models or our strategic investment in supply chains, these are fundamental, long-term tasks. The time mismatch between investment and return will inevitably have a direct impact on our performance in specific periods.

Zhao Jia Zhen

We have communicated this to you many times before: between short-term financial performance and the long-term value of the platform ecosystem, we will firmly choose the latter. Therefore, as we continue our strategic investments, coupled with the current complex and volatile macroeconomic environment, the company's future profit margins will continue to fluctuate between different quarters, and this will become the norm.

Zhao Jia Zhen

In the past few months, the major strategy we formally announced at the shareholder meeting is being translated into concrete projects. The business and organization are undergoing profound changes. We suggest that everyone not focus too much on single-quarter profit margin metrics, but rather to focus more on the high-quality development of our platform ecosystem. Only a healthy platform ecosystem and a strong supply chain platform can achieve long-term sustainable growth in intrinsic value.

Moderator

Thank you, Joyce. Thank you, Jia Zhen. Thank you all for attending our meeting today. We look forward to speaking with you again next quarter. Thank you, and have a great day.

Operator

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.