BOC International has initiated coverage on Mixue Group (HKG: 02097), assigning an 'Add' rating. This assessment is based on several key factors.

Firstly, the company holds a dominant position in the tea beverage market and demonstrates competitive strength in the coffee segment. Overall, it possesses significant competitive advantages in lower-tier cities, positioning it well to benefit from the growth potential in these markets.

Secondly, Mixue Group's international expansion strategy leads the industry. Its multi-regional growth approach and increasing store count are expected to create new growth drivers.

Thirdly, the company continues to enhance its supply chain infrastructure and maintain a healthy franchisee ecosystem. These efforts build a robust competitive moat, helping to safeguard its advantages against market volatility.

Finally, the development of the brand's intellectual property is expected to foster emotional resonance with consumers, creating an emotional barrier. With rising IP popularity, the potential for monetization is also expanding.