Shares of low-cost Chinese e-commerce giant PDD plunged on Monday, but it’s still a buy, according to some analysts. Those Nasdaq-listed shares fell nearly 29%, and declined further on Tuesday and Wednesday. The stock is now down around 36% so far this week. PDD, which owns discount platforms Pinduoduo in China and Temu for the international market, had reported second-quarter earnings that fell short of expectations. Its revenue of 97.06 billion yuan ($13.6 billion) rose 86% from the same period a year ago. That missed analysts’ average estimates of around 100 billion yuan, according to LSEG. Ben Harburg, founder and portfolio manager at CoreValues Alpha, pointed out that the “thing that’s come to bite them” in its most recent earnings is that PDD has been subsidizing its global business using its strong performance in China, where it has been a dominant e-commerce player. “So they were able to subsidize this massive growth of Temu as it expanded into Western markets and more kind of higher margin markets using that Chinese stronghold, but now Chinese consumer businesses are under threat,” he told CNBC’s ” Squawk Box Asia ” on Tuesday. Harburg said the problem is that PDD faces a saturated market — with competition from JD, Alibaba, Shein and Amazon — and slower consumer growth in China. Despite those challenges, he said, PDD is a long-term buy, describing the stock’s plunge as an “overreaction” by markets. “We believe, long term, this business is incredibly strong. It is not just doing well in China, but obviously dominating .. emerging and mature markets as well,” he said, adding that the shares will be “edging back upward” in the coming months. He believes that as real estate prices stabilize — China has been facing a property crisis — consumption in the country will improve. In an Aug. 27 note, HSBC also maintained its buy call on PDD, though it cut its price target for the stock from $208 to $189. It said it remains confident in PDD’s overseas growth and earnings “can show resilience,” although there are near-term headwinds. “More cautious comments from PDD, weaker-than-expected domestic results and lack of commitment to shareholder returns will likely weigh on share price, especially near term. But we think valuation remains attractive at [9 times FY24 price-to-earnings],” said HSBC analysts Charlene Liu and Charlotte Wei. It said Temu still leads in overseas markets when it comes to user growth and diversification. Morningstar reduced its fair value estimate for the stock by 26% to $171. Morningstar’s Senior Equity Analyst Chelsey Tam noted that PDD has said a long-term profitability decline is “inevitable” and margins will fluctuate in the near term. However, Tam believes PDD shares are “still cheap” when compared with the earnings growth of the Temu business. Overall, of analysts covering the stock, 32 lowered the price target in the past seven days. The consensus price target is now $172.29, which still gives it about 79% potential upside.