PDD Holdings Inc., the Chinese e-commerce giant, witnessed a significant 5.01% decline in its stock price during Friday's trading session. The plummet can be attributed to multiple factors, as revealed by the company's recent financial reports and market developments.

According to the company's third-quarter earnings release, revenue and profit fell short of market expectations, as promotional offers and discounts failed to persuade cost-conscious consumers to spend as much as anticipated on its e-commerce platforms. Intensifying competition and a broader price war in the industry have further exacerbated the company's challenges.

Furthermore, analysts have expressed concerns regarding PDD Holdings' growth prospects and profitability. HSBC, for instance, has turned more conservative on the company's earnings outlook, citing increasing consumer subsidies and investments to support merchants and defend market share, which could weigh on its margins. The firm has consequently lowered its revenue estimates for the company while maintaining a "buy" rating but with a reduced target price.