What happened

Shares of Pinduoduo (PDD -2.99%) were surging today after the Chinese e-commerce company posted strong results in its second-quarter earnings report, easily outpacing analyst expectations.

As of 9:46 a.m. ET on Monday, the stock was up 17.3%.

So what

The company, which has differentiated itself with a mobile-only platform where buyers pool together with friends and family to get better prices on products, said that revenue in the quarter rose 36% to $4.69 billion, well ahead of estimates at $3.49 billion.

The company, which has also become China's largest online market for agricultural products, posted strong sales during the June 18 shopping holiday, and operating income surged as the company controlled sales and marketing spending, its biggest operating expense.

On an adjusted basis, operating income more than tripled to $1.58 billion, which was due in part to a delay in spending on certain projects. Adjusted earnings per share jumped 165% to $1.13, which crushed the analyst consensus at $0.39.

Pinduoduo's decision to waive commissions to merchants selling agricultural products seems to have given the company a boost, and helped it outperform peers like Alibaba and JD.com, each of which posted sluggish growth in the second quarter.

CEO Lei Chen said, "We saw a recovery in consumer sentiment in the second quarter, especially during the [June 18] 
shopping festival, a reflection of the resilience of overall consumption." Management also promised to continue investing in areas like agriculture and research and development.

Now what

Pinduoduo did not offer guidance in the report, but investors have to be encouraged by its momentum on both sides of the income statement, especially compared to flat to single-digit top-line growth from Alibaba and JD.com. News last week that the U.S. and China were nearing an agreement that could prevent the delisting of Chinese stocks from U.S. exchanges also gave Chinese stocks a lift, and Pinduoduo is also planning on an international expansion.

While Chinese e-commerce stocks have been dangerous territory for investors because of regulatory challenges, there's a lot to like about Pinduoduo's business right now, especially at the current share price.