(Yicai Global) March 22 -- Pinduoduo’s shares sank after the leading Chinese group-buying platform reported slower revenue growth for the final quarter of last year as online consumption softened.

Pinduoduo's US-listed stock price [NASDAQ: PDD] closed 6.1 percent lower at USD39.99 yesterday, and was 0.7 percent down in after-hours trading. The shares have slipped almost 30 percent in value this year.

Between October and December, revenue rose 3 percent to CNY27.2 billion (USD4.3 billion) from a year earlier, the Shanghai-based firm said in its earnings report yesterday. Growth slowed due to fluctuations in user activity, said Liu Jun, vice president of finance. In the fourth quarter of 2020, revenue had surged 146 percent to CNY26.5 billion.

Pinduoduo's number of monthly active users climbed 2 percent to 733.4 million as of Dec. 31, 2021, from a year earlier. Such growth may be mild but each user was spending CNY2,810 (USD441) on the platform per year, rising by 33 percent.

However, profitability was up. The group-purchasing platform operator reported net profit for three straight quarters last year. Gains were CNY6.6 billion (USD1 billion) in the fourth quarter, compared with a net loss of CNY1.4 billion in the same quarter 2020. Moreover, the number had quadrupled from the third quarter.

Last year Pinduoduo broke even. For the whole year of 2021, net profit tallied CNY7.8 billion, compared with a net loss of CNY7.2 billion in 2020. Revenue jumped 58 percent to CNY94 billion. 

The main source of income was growing in the last quarter of 2021. Revenue from online marketing services climbed 19 percent to CNY22.4 billion. That of transaction services more than doubled to CNY81.7 million (USD12.8 million). But income from merchandise sales dropped by 98 percent to CNY81.7 million. The firm sells some of its self-produced goods on the platform.

Meanwhile, expenses were declining. The firm's cost of revenue was CNY6.5 billion, a 43 percent decrease from a year earlier, caused by reduced merchandise sales and decreased server costs due to a one-off rebate from one service provider.

Agricultural products are central to the firm's direction forward. "In 2021, we made the strategic shift from sales and marketing toward research and development, especially long-term investment in agriculture and R&D," said Chairman Chen Lei. The company will allocate profits from the fourth quarter to the 10 Billion Agriculture Initiative to deepen its digital inclusion efforts among farmers, Chen added.

Editor: Emmi Laine, Xiao Yi