$PDD(PDD.US) 3Q24 financial report quick interpretation: At first glance, Pinduoduo's financial report this time can be described as a double miss in revenue and profit, comparable to the severity of the last earnings shock.

1) Specifically, the core and most critical advertising revenue growth of 24% is completely in line with market expectations and did not experience an earnings shock, which is crucial. However, the trend still indicates that the company's take rate increase has been quite limited. The growth rate of advertising is rapidly converging with the growth rate of GMV;

2) The revenue miss entirely comes from commission income, which was actually 50 billion, 3 billion less than expected. The first reaction from Dolphin Investment Research is that it may still be due to the difficulty in accurately grasping the revenue from the Temu business. However, combined with the gross profit also being about 3 billion less than expected, we believe that the actual miss point is on the main site's commission income. The recently promoted "subsidies" to merchants may reflect a decline in main site commission income through reduced commission rates or refunds. Since the marginal cost of this part is almost unrelated to revenue, the marginal decrease in revenue has all converted into a marginal decline in gross profit.

3) In terms of operating expenses, marketing expenditure has significantly increased to 30.5 billion, but is generally in line with expectations. Although the growth is not only as expected, the acceleration of marketing expenditure is obviously not good news, but at least it is an expected issue and cannot be considered a "shock."

4) Ultimately, the extent to which commission income is below expectations is fully transmitted to gross profit, and then transmitted to the miss in operating profit.