Meituan‘s Hong Kong-listed shares fell more than 5% on Friday after CEO Wang Xing warned of a food delivery slowdown in the next quarter.

“For our food delivery, we expect the third quarter or the volume will slow down, but still be more resilient than other consumption-related sectors,” Wang said during the earnings call on Thursday.

On Thursday, Meituan posted strong second-quarter results.

Revenue was 67.96 billion Chinese yuan ($9.33 billion), up 33.4% from 50.93 billion yuan posted in the same period a year ago. The firm also swung to profit of 4.69 billion Chinese yuan for the second quarter, compared to a loss of 1.11 billion Chinese yuan a year ago.

“We have seen some short-term headwinds due to macro economy and extreme weather conditions.”

Regions such as Beijing, Tianjin and the provinces of Hebei, Shanxi and Henan experienced extreme rain in July, causing widespread flooding. Typhoon Doksuri swept north after ravaging southern Chinese provinces.

“Extreme weather brings challenges to our business. Many merchants had to suspend their business, while consumers chose to stock packaged food instead of ordering fresh food delivery. In some cities, food delivery was even suspended in order to ensure safety,” said Wang.

Meituan leads China’s food delivery market, holding almost 70% of the market share in the mainland, according to a 2022 report on Meituan.

Besides food delivery, the tech firm also operates various services including ride-hailing, on-demand delivery, hotel and travel booking, movie ticketing, entertainment and lifestyle services.

Xiaolin Chen, head of international at KraneShares, is bullish on Meituan.

The investment firm has a price target of 205 Hong Kong dollars ($26.14) on the stock, which represents a 35.2% upside from the current price of HK$132.80.

“They literally gained a lot of market share during [the pandemic]. They managed to grab lower tier cities and I believe [that] kind of market share will become sticky with them,” Chen told CNBC’s “Squawk Box Asia” on Friday.

Wang said consumers will likely dine out more as the economy recovers, which could lead to a lower demand for food delivery.

“So far in third quarter, offline traffic and travel demand continue to recover rapidly. Consumers’ pent-up demand for offline consumption is further released, and this will lead to a temporary squeeze on food delivery transactions as people go out more often,” said Wang.

Credit rating agency Fitch Ratings still expects China’s gross domestic product to grow 5.6% in 2023 as the economy normalizes following very weak consumption growth last year, according to a July report. This is slightly higher than the Chinese government’s growth target of around 5%.

Meituan’s CEO said he remains confident of long-term growth in its food delivery business.

“Order volume in Q3 last year was a relatively high base, but we think a temporary slowdown in order volume growth is due to external factors,” said Wang. “We will continue to activate our product and operational strategy to better capture the demand and stimulate the recovery.”

Meituan is also deploying autonomous delivery vehicles which have been “more widely applied in more scenarios,” said Wang.

Chinese self-driving car firm Pony.ai announced in March that it is partnering Meituan to build unmanned vehicles for food delivery services.

Chen said that leveraging artificial intelligence tech in food delivery is key to “improving costs and services for clients.”

“We will leverage our proprietary research and external investment to explore the use of AI and autonomous delivery and other cutting edge technologies,” said Wang.

In May, Meituan rolled out a sister app in Hong Kong, as it looks for new markets outside of mainland China.

Chinese stocks soared Tuesday as Beijing pledged to ramp up measures to bolster China’s sputtering economy.

Hong Kong’s Hang Seng Index surged more than 3%, China’s tech-heavy ChiNext rose 1.8% and the Shanghai Composite Index increased 1.81% on Tuesday morning in Asia.

Chinese property developers Country Garden and Longfor soared 14.3% and 20.7% respectively. Sunac rose 12.5%, China Vanke was up 11.02% and China Overseas Land and Investment grew 11.39%.

A day earlier, Chinese real estate stocks tumbled on renewed debt fears. The Chinese government cracked down on the property sector’s debt levels in August 2020.

The stock rebound comes after China’s top leaders pledged on Monday to ramp up policy support to boost domestic consumption as the post Covid rebound has been slower than expected.

According to official data, China’s gross domestic product in the second quarter increased 6.3% from a year ago, performing worse than the 7.3% economists predicted. This was a 0.8% growth from the first quarter, and was slower than the 2.2% quarter-on-quarter pace recorded in the January to March period.

China’s top leaders met Monday for the much-anticipated Politburo meeting and hinted at moves to “adjust and optimize” property policy in what the leadership called a “torturous” economic recovery.

State news agency Xinhua quoted the 24-member Politburo as saying “the economy is facing new difficulties and challenges.” That’s mainly due to weak domestic demand, operational challenges for companies as well as “a grim and complex external environment,” it said.

“The meeting emphasized that it is necessary to actively expand domestic demand, give full play to the basic role of consumption in driving economic growth, expand consumption by increasing residents’ income,” according to Xinhua.

“It is necessary to boost the consumption of automobiles, electronic products, and home furnishing, and promote the consumption of services such as sports, leisure, and cultural tourism,” said the report.

Hong Kong-listed shares of internet giants rose on Tuesday. Alibaba shares soared 4.7%, while Tencent was up nearly 4%. Meituan and Baidu shares were higher by 5.7% and 6.8% respectively.

In the electric vehicle space, Xpeng soared 11%, Li Auto was up 4.15% and BYD rose 2%.

“This is a reconfirmation that the [Chinese] policymakers have heard the market concern on more support needed for the domestic economy,” said Xiaolin Chen, head of international at KraneShares, on CNBC’s “Street Signs Asia” Tuesday.

“They want to achieve the 5% GDP target of this year. The first job they need to do is to create jobs for the labor force in China,” said Chen.

“I do certainly see some encouraging language released from the statement that removed a lot of the concerns of people having a high focus on real estate market, employment, private investment, and so on. So far, the language has been encouraging.”

SINGAPORE — Shares in Chinese tech firms mostly rose in mixed Asia-Pacific trading on Monday, with oil prices falling more than 3%.

The Hang Seng index in Hong Kong advanced 1.05%.

Shares of Meituan soared 10.89% while Tencent climbed 2.86%, as of the final hour of trading in Hong Kong on Monday.

Meituan on Friday posted better-than-expected revenue for the last three months of 2021. The company’s revenue for the fourth quarter came in at 49.52 billion yuan ($7.78 billion), above mean analyst expectations for a 49.2 billion yuan print, according to data from Refinitiv Eikon.

The Hang Seng Tech index remained in positive territory, rising 2.13%. Some Chinese tech stocks, however, slipped: Baidu edged 0.63% lower while JD.com dropped 3.06%.

“Even if you look now, where we see very significant and sharp falls so that valuations now are at much more reasonable levels, I think it’s still quite difficult for investors … to really build the courage to go back in at these levels,” Mark Konyn, group chief investment officer at AIA, told CNBC’s “Squawk Box Asia” on Monday.

The broader Asia-Pacific markets struggled for direction on Monday.

Mainland China’s Shanghai composite gained 0.07% to close at 3,214.50 while the Shenzhen component shed 1.017% to 11,949.94.

In Australia, the S&P/ASX 200 closed fractionally higher at 7,412.40. Singapore’s Straits Times index also climbed 0.38% in afternoon trade.

MSCI’s broadest index of Asia-Pacific outside Japan traded 0.11% lower.

Oil prices declined in the afternoon of Asia trading hours, with international benchmark Brent crude futures down 3.52% to $116.40 per barrel. U.S. crude futures slipped 3.97% to $109.38 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.2 following a recent climb from below 98.7.

The Japanese yen traded at 123.61 per dollar, weaker than levels below 120 seen against the greenback last week. The Australian dollar was at $0.7512, having risen from below $0.74 last week.

Correction: This article was updated to accurately reflect the moves of the Japanese yen during Asia trading hours on Monday.