MIXUE GROUP  has hit another new high recently, BofA Securities released a research report noting. The company's share price has already snowballed by about 1.8 times since its listing in early March.

While MIXUE GROUP is the largest and most outstanding freshly made tea beverage brand in China, BofA Securities believed that its fundamentals might not be able to support its current valuation. The recent rally has been driven by capital inflows, but much of the good news has already been priced in. The broker emphasized that capital flows couldn't support the share price forever.

Shares of Mixue Group fell 3% on Tuesday.

In addition, there is still debate over whether MIXUE GROUP truly belongs in the "new consumption" sector. BofA Securities noted that the upside potential of the company's EPS is likely far lower than that of IP companies like POP MART. The broker downgraded MIXUE GROUP's rating from Neutral to Underperform but raised its target price from HKD400 to HKD465.