(March 24): Mixue Group posted better-than-expected earnings in 2025, with revenue and profit both surging over 30% as China’s largest bubble-tea chain weathered a fierce price war.
Revenue climbed 35% to CNY33.56 billion (US$4.87 billion or $6.24 billion), slightly above the average analyst estimate of CNY32.94 billion. Net profit rose 33%, compared with a consensus estimate of 31%.
Shares jumped 8.5% in Hong Kong on Tuesday after the results, marking the steepest intraday gain in nearly three months.
Despite the upbeat results, Mixue’s stock has lost nearly half its value since its June 2025 high. The company, which was listed in Hong Kong last March, has been caught in a bruising battle among food delivery platforms, restaurants and tea chains, raising investor concerns about profitability. To defend market share, Mixue rolled out aggressive online promotions last year, offering milk teas for as little as two yuan.
Analysts remain cautious. UBS downgraded Mixue to 'neutral' from 'buy' in January and cut its price target, citing near-term headwinds including rising raw material costs, a higher share of delivery sales, and intensifying competition. The company’s 2026 gross profit margin is expected to narrow from last year’s level, analysts including Christine Peng wrote.
“Subsidy-driven promotions raised consumers’ expectations for value for money, setting a higher bar for product competitiveness across the industry,” Mixue said in the earnings statement.
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The sector’s price war has shown signs of easing in recent months, with major restaurant and beverage chains raising prices on food delivery platforms. China’s top antitrust body also launched an investigation into competition practices in the online food delivery industry, responding to concerns that giants like Alibaba Group Holding Ltd, Meituan and JD.com Inc were spending billions on subsidies to gain market share.
Mixue operated 55,356 outlets in China and about 4,500 overseas as of end-2025. It is eyeing a more ambitious global expansion, with new stores opening in Los Angeles and New York.
China’s dining sector has struggled over the past year, with players ranging from budget coffee chains to premium restaurants reporting weak results. Luckin Coffee Inc, the country’s largest coffee chain, posted weaker-than-expected net revenue last quarter and its operating margin dropped as delivery expenses almost doubled.
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Dine-in restaurants such as hotpot chain Haidilao International Holding Ltd and Sichuan sauerkraut fish specialist Tai Er reported same-store sales declines ranging from the single digits to 20% in the first half of 2025. Premium Shanghainese dining chain operator Shanghai XNG Holdings Ltd abruptly shut all its outlets in the Chinese financial hub earlier this year amid the price war and a broader consumer pullback.
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