(Yicai) Aug. 25 -- Meituan’s shares dived after the online services provider said growth in its core food delivery business will likely slow this quarter due to extreme weather in China and despite the firm swinging into the black in the previous three months.

Meituan [HKG: 3690] closed 5.6 percent down at HKD132.20 (USD16.86) a share in Hong Kong today, after sinking by as much as 7 percent in morning trading. 

“We have seen some short-term headwinds due to macro economy and extreme weather conditions,” founder and Chief Executive Wang Xing said on the Beijing-based firm’s earnings conference call yesterday.

Meituan expects a third-quarter slowdown in the food delivery business, which will still be more resilient than other consumption-related sectors, Wang said. Income from its in-store, hotel, and travel businesses will likely increase greatly from a year ago, he noted.

But any negative economic impact is just temporary, and Meituan remains optimistic about the long-term growth of China's economy, Wang noted. “We are confident that our food delivery business will grow more healthy this year compared to other consumer sectors. We remain confident on the long-term growth of our food delivery business.”

In the three months ended June 30, Meituan had a net profit of CNY4.7 billion (USD645.2 million), versus a net loss of CNY1.1 billion a year ago, thanks to growth in its core local commerce segments, including food and beverage takeouts and the hotel business, its financial report showed. Revenue jumped 33 percent to CNY68 billion (USD9.3 billion).

“Furthermore, we successfully capitalized on the recovery in outbound travel by increasing the supply of overseas hotels and broadened our outbound travel customer base,” Wang said.

Income from core local commerce segments, including food and beverage takeaway, flash sales, and in-store, hotel, and travel businesses soared 39 percent to CNY51.2 billion. Recovering local consumption, the firm's efforts, and the growth in the number of instant deliveries and related transaction value contributed to the jump in income, it pointed out.

The transaction volume of Meituan's delivery service and flash sales hit a record high in the second quarter, with monthly takeaway orders also reaching a record this month. Daily orders of the company's flash sales surpassed 11 million to a new high last quarter, with the segment’s number of merchants rising 30 percent from a year ago. 

With the constant update of Meituan's networks, it can provide customers with more affordable and better quality services, Wang added. “We actively optimized our software, hardware, and overall operations,” he said. “And as delivery volume goes up, we expect cost order for autonomous delivery to decrease in the future.”

Editors: Xu Wei, Martin Kadiev