MEITUAN-W released its Q2 financial results showing an 89% decline in profits, largely in line with market expectations given the intensifying competitive landscape in China's e-commerce sector.

The substantial profit decline was anticipated by investors, particularly following JD.com's 10 billion yuan loss in the second quarter. MEITUAN-W's approximately 8 billion yuan loss reflects the company's higher organizational efficiency amid the ongoing price war.

Market participants had expected continued pressure on margins, as the current competitive battle shows no signs of abating in the near term, with companies unlikely to cease aggressive spending until clear market positioning emerges.

During Wednesday evening's earnings call, Chen Shaohui, Senior Vice President and Chief Financial Officer of MEITUAN-W, provided guidance for the third quarter, indicating not only reduced profitability but actual significant losses ahead.

"We expect competition to persist in the short term and negatively impact our financial results. However, I want to emphasize that the resilience of our core local commercial business has been proven across multiple cycles. Each challenge ultimately strengthens our competitive position, enhances our execution capabilities, and drives operational excellence. Looking beyond short-term volatility, we remain confident in our ability to maintain healthy, high-quality growth over the long term," Chen stated during the conference call.

CEO Wang Xing explained that MEITUAN-W anticipates significant losses in its core commercial business during the third quarter due to strategic investments. These investments are primarily focused on providing high incentive measures to ensure price competitiveness and industry-leading delivery services, as well as marketing initiatives to strengthen brand awareness.

Following the negative guidance, MEITUAN ADR shares declined more than 9% in pre-market trading.