"King of Snow" MIXUE GROUP is currently facing duress on two fronts: the capital market and its operational performance. On September 9th, shares of MIXUE GROUP (02097.HK) closed at HK$200, dipping below its IPO issue price of HK$202.5. The stock subsequently trended downward, reaching HK$187.9 by September 15th, remaining under the HK$200 mark and bringing the company's total market capitalization to HK$71.33 billion.

In June of last year, MIXUE GROUP's market value peaked at over HK$230 billion. However, more than a year later, its valuation has retreated to HK$71.33 billion. Looking at 2026 alone, the company's share price has been halved since the start of the year. This shift in market sentiment stems from the old growth narrative of MIXUE GROUP beginning to crumble.

Where the cracks first appeared

MIXUE GROUP's interim results for 2026 reveal a period of revenue growth without a corresponding increase in profit. In the first half of the year, revenue grew 2.29% year-on-year, while net profit attributable to shareholders fell 14.73%, marking the first such decline since the company began publishing financial reports. The results also showed that while the store network continued to expand rapidly, this expansion did not translate into proportional gains in overall performance.

Confronted with a growth ceiling, MIXUE GROUP has established multi-brand, globalisation, and digital intelligence as its core strategies, aiming to solve its growth challenges through these three avenues. However, whether it can regain a high-growth trajectory through this combination remains an open question for the market.

As financial pressures mount, capital is re-evaluating the growth potential of this beverage giant. Now trading below its IPO price, the company is grappling with a first-ever drop in half-year net profit.

A tale of two diverging metrics

MIXUE GROUP is a freshly-made beverage enterprise whose core products were priced around RMB 6 in its prospectus. Leveraging a franchise model, it achieved rapid store expansion and listed on the Hong Kong Stock Exchange on March 3, 2025, with a market value exceeding HK$100 billion on its debut. A subsequent rally pushed its valuation past HK$230 billion by June 2025.

The stock has been under pressure since late August, repeatedly falling into a state of having broken its issue price. The culprit is the weak first-half 2026 report. Revenue for the period was RMB 15.22 billion, a 2.29% increase, while net profit attributable to shareholders was RMB 2.296 billion, down 14.73% from a year earlier. This is a sharp deceleration from the 39.32% revenue growth and 42.90% net profit growth recorded in the first half of 2025.

The revenue increase was attributed to higher income from the sale of goods and equipment, as well as franchise and related services. Notably, however, the growth in revenue significantly lagged behind the pace of store expansion. As of June 30, 2026, MIXUE GROUP had 63,987 stores globally, an increase of 10,973 stores, or roughly 20.7% year-on-year. Of these, 59,609 were in mainland China, up by 11,328 stores, or roughly 23.5%. Despite this double-digit store growth, revenue growth remained in single digits, creating a clear divergence.

Industry sources have pointed out that this gap stems from declining per-store sales. An excessive number of outlets has led to internal competition and customer diversion, while franchisee purchasing volumes have also seen a reduction, weakening the marginal effect of store expansion. Several factors have combined to compress MIXUE GROUP's profit margins: a sharp slowdown in revenue growth of over 30 percentage points compared to last year; a 4.1% increase in sales costs which led to a 1.21 percentage point decline in gross margin; and a high comparison base created by the 2025 food delivery platform subsidy war, which inflated store order volumes and distorted year-on-year comparisons.

Compared to its listed peers, MIXUE GROUP's profit performance stands out negatively. In terms of revenue for the first half of 2026, MIXUE GROUP, Guming, Chagee, ChaBaiDao, Shanghai Auntie, and Naixue Tea recorded revenue of RMB 15.22 billion, RMB 7.47 billion, RMB 6.961 billion, RMB 2.655 billion, RMB 2.589 billion, and RMB 1.892 billion, respectively, with revenue growth rates of 2.29%, 31.91%, 3.51%, 6.21%, 42.4%, and -13.09%. While MIXUE GROUP's revenue growth is positive, it trails the pace of Guming and Shanghai Auntie.

On the profitability front, net profits attributable to shareholders for the same six companies were RMB 2.296 billion, RMB 1.571 billion, RMB 917.6 million, RMB 336.3 million, RMB 321.2 million, and -RMB 97 million, respectively. The growth rates for these net profits were -14.73%, -3.36%, 22.61%, 3.2%, 58.32%, and 16.73%. Among these six listed tea companies, MIXUE GROUP suffered the steepest decline in net profit growth.

As competition intensifies and costs rise in the new-style tea sector, MIXUE GROUP is transitioning from a story driven purely by store scale to a new phase. The key question is how it will enhance quality and efficiency to sustain its growth narrative.

Can three strategic pillars fix the growing pains?

MIXUE GROUP has set a long-term goal of building a global, century-old brand. Its three core strategies 鈥?multi-brand, globalisation, and digital intelligence 鈥?are designed to forge new growth engines. Its brand portfolio now includes the flagship Mixue Bingcheng, the affordable freshly-ground coffee brand Lucky Cup, and the freshly-drawn beer brand Fresh Beer Fulu Family. The main brand has also spawned the popular "Snow King" IP, with plans to expand into animated content, comics, films, merchandise, and even theme parks.

Analysts view both the coffee and beer segments as potential secondary growth curves. Since its launch in 2017, Lucky Cup has built a chain offering core products priced between RMB 2 and RMB 10, covering classic, popular, and innovative coffee styles, focusing on high quality at a low price point. By June 30, 2026, MIXUE GROUP's fully automated coffee machines were present in over 3,000 stores.

The Fresh Beer Fulu Family brand, acquired as a strategic asset in 2025, offers freshly-drawn beer at prices ranging from RMB 6 to RMB 11 per 500mL. Its range includes fruit beer, tea beer, and milk beer, designed to tap into diverse consumption scenarios. While Mixue Bingcheng has already achieved nationwide recognition, MIXUE GROUP plans to gradually boost the brand awareness of Lucky Cup and Fresh Beer Fulu Family while maintaining its high-quality, affordable positioning. It has yet to disclose operating figures for these two newer brands, leaving their actual contribution to the market an open question.

MIXUE GROUP is also a representative of Chinese consumer brands "going global," but its overseas store network has shrunk consistently. The number of stores outside mainland China stood at 4,895 at the end of 2024, fell to 4,467 by the end of 2025, and dropped further to 4,378 in the first half of 2026, a cumulative reduction of 517 stores in 18 months. In an earnings briefing, the company explained that it is proactively and systematically adjusting its Southeast Asian operations.

Long term, its global plan is to deepen its presence in Southeast Asia and gradually enter emerging markets in Central Asia and the Americas, selecting target geographies based on population, economic level, and consumer preferences. Market watchers suggest that globalisation represents a long-term incremental opportunity, but building a stable profit contribution will require validating the profitability model in individual regions first.

In the digital intelligence space, MIXUE GROUP is working on integrating online ordering, store operations, supply chain, and corporate management. Both hardware and software upgrades are being deployed to improve consumer experience and operational efficiency. The competitive battleground for freshly-made beverage companies is shifting from sheer expansion speed and scale to an emphasis on efficiency and quality.

The old engine of "open a store, make money" appears to have run its course. MIXUE GROUP may be leaving behind the era of easy expansion as it faces fierce red-ocean competition at home, works to refine its profitability model abroad, and nurtures its young multi-brand portfolio. For the company, discovering and validating a truly new growth engine will prove to be a long and testing marathon.