Temu Parent PDD Stock Sinks on Worse-Than-Expected Q2 Sales

American depositary receipts (ADRs) of Chinese e-commerce company PDD Holdings (PDD) are plunging in premarket trading Monday after the parent of discount marketplace Temu reported second-quarter sales of 97.06 billion yuan ($13.63 billion), below consensus estimates of analysts polled by Visible Alpha.

 “While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead,” PDD chairman and co-CEO Lei Chen said.

PDD Sees Revenue Growth, Profitability Under Pressure

“Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges,” PDD vice president of finance Jun Liu said. “Profitability will also likely to be impacted as we continue to invest resolutely.”

Rival Alibaba (BABA) also reported quarterly earnings that missed analysts’ estimates earlier this month as the online retailers struggle with a weak Chinese economy and amid reports that Amazon (AMZN) has begun pitching Chinese suppliers on a new section of its website that would sell low-cost clothes and home goods to U.S. consumers directly from China.

PDD ADRs plummeted about 17% at $115.88 an hour before the opening bell Monday. They had fallen 4% on the year through Friday’s close.