MIXUE GROUP (02097.HK), which had been declining for several consecutive days, saw its share price surge by up to 8% during trading on the 24th, closing nearly 6% higher with a market capitalization reaching HK$130 billion.
The significant increase was driven by its impressive revenue and profit figures in the 2025 financial report. The report indicated that the company's total number of global stores surpassed 60,000, exceeding McDonald's and Starbucks to rank first worldwide.
During the same period, the company reported revenue of RMB 33.56 billion, a year-on-year increase of 35.2%. Its annual profit was RMB 5.93 billion, up 33.1% compared to the previous year.
However, behind this strong annual performance, changes in several key operational metrics are sounding an alarm for the world's largest freshly-made beverage chain by store count.
The number of franchisee store closures surged by 57% to 2,527 in 2025, a sharp increase from the 1,609 closures in 2024. Although 14,496 new stores were opened during the same period, resulting in substantial net growth, the significant rise in the closure rate has inevitably prompted market scrutiny regarding individual franchisees' profitability and return on investment.
According to the financial report, while the total store count grew by 28.7%, the average revenue and profit per store still achieved modest growth of 5.0% and 3.4%, respectively. The Group's growth in 2025 was not solely reliant on store expansion, as the average contribution from existing stores also improved. This may be attributed to optimized supply chain efficiency, the promotion of new high-margin products, or increased selling prices to franchisees.
The growth rate in average profit per store (3.4%) was lower than that of average revenue per store (5.0%). This aligns with a previously observed slight decline in the comprehensive gross profit margin, which fell from 32.5% to 31.1%, suggesting that rising costs or promotional discounts have somewhat eroded profit margins.
It is important to emphasize that these calculations reflect the average value the Group derives from each store, not the end retail profitability of individual franchisee outlets. The vast majority of MIXUE GROUP's revenue comes from selling goods and equipment to its franchisees. Therefore, "average revenue per store" essentially represents the Group's business-to-business sales to each outlet. Costs such as store rent, labor, and utilities borne by franchisees, along with their final retail profits, are not reflected in the Group's financial statements.
Group prosperity and end-point pressure may coexist. Growth in the Group's per-store contribution value might not synchronize with the retail profitability situation of franchisees. For instance, the Group may achieve revenue growth by selling more products to franchisees, but intense market competition and frequent promotions at the retail level could lead to thin profit margins for franchisees. The 57% year-on-year surge in recent store closures provides supporting evidence of operational pressures at the endpoint.
This intensifies market concerns about the inherent health of the vast franchise network—is the prosperity of the headquarters' supply chain (reflected in B2B revenue growth) coming at the expense of profitability pressures for the end-point franchisees (the consumer-facing side)? If endpoint profitability continues to be under pressure, it will directly impact franchisees' willingness to open new stores or maintain existing ones, ultimately affecting the Group's supply chain revenue. This is a core challenge that MIXUE GROUP's "tens of thousands of stores" model must address in the long term.
The market had previously placed high hopes on MIXUE GROUP's overseas expansion, viewing it as a key narrative supporting its high valuation. In December 2025, the opening of its first store in Los Angeles, USA, fueled by an ultra-value strategy featuring "$1 ice cream," went viral on social media, causing its stock price to surge over 10% in a single day. Previously, upon its listing in Hong Kong as one of the "three golden flowers of new consumption," it achieved a massive oversubscription of 5,258 times, becoming the top stock for freezing capital, highlighting significant market enthusiasm.
However, after the initial excitement, the stock price has generally shown weakness. Having retreated from the historical high reached in mid-2025, the stock has not replicated the strong performance seen during its initial listing period, despite the latest annual report showing record highs in both revenue and profit.
A shift in overseas strategy from expansion to "optimization and contraction" appears to be a factor. The company's 2025 financial report shows that the total number of MIXUE GROUP's overseas stores decreased from 4,895 at the end of 2024 to 4,467 at the end of 2025. The company explicitly stated that in markets like Indonesia and Vietnam, it is "focusing on implementing operational adjustments and optimization measures for existing stores," which directly led to a net reduction in store count.
This contrasts with the market's expectation of replicating domestic success overseas and continuing rapid expansion. As early as June 2025, investment banks like UBS had downgraded their ratings on the stock due to slower-than-expected overseas recovery, pointing to fierce local competition in markets like Indonesia and Vietnam. While this shift may represent a pragmatic response to different market environments, consumer habits, and operational challenges, it has also tempered market expectations regarding the company's ability to replicate its model globally.
For MIXUE GROUP, which already boasts nearly 60,000 stores, mere scale expansion is no longer the end goal. As the overseas expansion narrative encounters real-world challenges, and domestic growth is accompanied by a rising store closure rate and gross margin pressure, the market is naturally reassessing the company's risk premium, leading to pressure on its stock price.
The focus is shifting from applauding the disruptive potential of its "ten-thousand stores going global" to a more sober examination of its operational efficiency across different markets, the profitability model for endpoint stores, and the quality of its growth. The current stock price weakness does not negate its business model but rather reflects the market's search for a more appropriate valuation that accounts for uncertainties in its overseas business and operational pressures within its domestic network.
The company's future prospects will depend on its ability to consistently demonstrate in quarterly reports that its vast store network is not only growing in size but also strengthening in overall profitability health and risk resilience.