(Yicai Global) Aug. 30 -- Pinduoduo’s shares surged after the Chinese e-tailer logged a nearly fourfold increase in net profit in the second quarter, marking a fifth profitable quarter in the run-up to the platform’s overseas expansion, and despite it offering a word of caution on future earnings growth.

In pre-market trading in New York today, Pinduoduo [NASDAQ: PDD] was up 3.6 percent at USD68.42 a share as of 6.27 a.m. local time, after closing 14.7 percent higher yesterday. The stock is still almost 30 percent down over the past 12 months.

Net income was CNY8.9 billion (USD1.3 billion) in the three months ended June 30, compared with CNY2.4 billion in the same quarter of last year, the Shanghai-based firm said in a financial report released yesterday. Revenue rose 36 percent to CNY31.4 billion (USD4.7 billion), mainly because of an increase in merchant activities, resulting from a recovery in consumption.

“We saw a recovery in consumer sentiment in the second quarter especially during the 618 shopping festival, a reflection of the resilience of overall consumption,” Chen Lei, chairman and chief executive, said in a statement.

But investors should not expect the same kind of growth in future quarters, Liu Jun, vice president of finance, said on Pinduoduo’s earnings conference call. Second-quarter profit was mainly attributable to some short-term and one-off factors that may not occur again, she said.

Advertising services made up the biggest part of revenue. Income from online marketing services surged 39 percent to CNY25.2 billion. Revenue from transaction services more than doubled to CNY6.2 billion, while that from merchandise sales was CNY50.7 million (USD7.6 million), down 97 percent. Curtailed business travel and related activities helped to pare expenses.

Investment was scaled back due to external factors, and some marketing activities and agricultural investment projects were postponed, Chen said. “During the short term, this might bring about decent financial results,” Chen said on the call. “But if we look at it with a long-term perspective, this actually weakens our competitiveness.”

Pinduoduo is preparing to launch its cross-border platform in the middle of next month, and the first market is the United States, according to media reports. The business model will resemble that of Shein, China's largest independent cross-border e-commerce platform. Pinduoduo is now signing up merchants in all product categories.

The company has constantly explored new opportunities while growing, and offshore business is part of that, Chen said.

“We also fully understand that overseas business will be full of challenges and need to be constantly tried,” he added, saying Pinduoduo will not simply repeat what others have done, but will strive to create it own unique value. That will not happen overnight, but the experience built up in the process will be very valuable to the company and the team, he said.

Editor: Emmi Laine, Xiao Yi