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United States securities and exchange commission logo
September 15, 2022
Lei Chen
Chief Executive Officer
Pinduoduo Inc.
28/F, No. 533 Loushanguan Road, Changning District
Shanghai, 200051
People's Republic of China
Re: Pinduoduo Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2021
Response dated
August 22, 2022
File No. 001-38591
Dear Mr. Chen:
We have reviewed your August 22, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
July 15, 2022 letter.
Form 20-F for the Year Ended December 31, 2021
Introduction, page 1
1. We note your response
to comment 1 and proposed revised future disclosure. In your
annual report, please
disclose that legal and operational risks associated with operating in
China also apply to
your operations in Hong Kong, as PRC regulations that may not be
currently applicable to
Hong Kong companies may become applicable given the PRC's
oversight of that
region. Please also discuss the regulations applicable to you in the
regions in which you
operate, such as Hong Kong.
Financial Information Related to Our VIE, page 9
2. We note your response
to comment 9 and reissue the comment in part. It appears from
Lei Chen
FirstName
Pinduoduo LastNameLei Chen
Inc.
Comapany 15,
September NamePinduoduo
2022 Inc.
September
Page 2 15, 2022 Page 2
FirstName LastName
your disclosures on page 4 and page F-12 that Hangzhou Weimi Network
Technology
Co., Ltd. is the WFOE that is the primary beneficiary of the VIE.
Please revise your
schedules to disaggregate this entity.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations, page 88
3. We note your response to comment 13 and reissue the comment in part.
To enhance a
reader's understanding of the material fluctuations in your revenues,
please further explain
the extent to which material changes in revenues is due to changes in
volume (active
buyers, merchants) and separately due to changes in prices. Please
also provide a
discussion of any known trends or uncertainties that you reasonably
expect will have a
material impact on future operating results. This could include trends
related to active
buyers, merchants, product offerings growth or uncertainties. Please
refer to Item 303(a)
and (b) of Regulation S-K.
Consolidated Financial Statement
2. Summary of Significant Accounting Policies
(q) Research and development expenses, page F-23, page F-23
4. We note your response to comment 15. Please explain to us how you
determined that
depreciation related to product improvements qualifies as research and
development.
Refer to ASC 730-10-55-2(d).
General
5. Please revise to name your PRC counsel where you state that your
position is based on the
advice of your PRC counsel.
6. When discussing the Holding Foreign Companies Accountable Act, please
update your
factual disclosure throughout your filing to discuss the fact that on
August 26, 2022, the
Public Company Accounting Oversight Board (PCAOB) signed a Statement
of Protocol
with the China Securities Regulatory Commission and the Ministry of
Finance of the
People's Republic of China, taking the first step toward opening
access for the PCAOB to
inspect and investigate registered public accounting firms
headquartered in mainland
China and Hong Kong.
7. We note your response to comment 7 and proposed revised future
disclosure. Please
expand your discussion in Item 3, the summary risk factors, and risk
factors sections to
include the risk that, to the extent cash in the business is in the
PRC or a PRC entity, the
funds may not be available to fund operations or for other use outside
of the PRC due to
interventions in or the imposition of restrictions and limitations on
the ability of you, your
subsidiaries, or the consolidated VIE by the PRC government to
transfer cash beyond
PRC government controls on currency conversion.
8. To the extent you have cash management policies that dictate how funds
are transferred
Lei Chen
Pinduoduo Inc.
September 15, 2022
Page 3
between you, your subsidiaries, the consolidated VIE or investors,
summarize the policies
and disclose the source of such policies (e.g. whether they are
contractual in nature,
pursuant to regulations, etc.); alternatively, state that you have no
such cash management
policies that dictate how funds are transferred.
You may contact Nasreen Mohammed at 202-551-3773 or Joel Parker at
202-551-3651 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Alyssa Wall at 202-551-8106 or Dietrich King at 202-551-8071 with any
other questions.
Sincerely,
FirstName LastNameLei Chen
Division of
Corporation Finance
Comapany NamePinduoduo Inc.
Office of Trade &
Services
September 15, 2022 Page 3
cc: Yuting Wu
FirstName LastName