Mixue's earnings growth slows

Themis Qi

Mixue Group's (2097) net profit increased by 39.8 percent to 4.45 billion yuan (HK$4.76 billion) last year, slowing from one year ago amid the intensified competition in the freshly-made drinks market.

The growth of earnings from 2022 to 2023 was 58.3 percent in 2023, when the giant stood out with its 3-yuan ice cream and 7-yuan lemonade and its supply chain-driven business model.

Last year's revenue grew 22.3 percent year-on-year to 24.8 billion yuan, attributed to increased revenue generated from sales of goods and equipment and from franchise and related services. But the pace also decelerates from 2023's 49.59 percent.

Revenue from sales of goods and equipment rose by 21.7 percent to 24.2 billion yuan, and income from franchise and related services increased by 52.8 percent 620.1 million yuan.

The gross profit margin for sales of goods and equipment rose by 2.8 percentage points to 31.6 percent, thanks to enhanced supply chain efficiency and lower purchase costs.

Through a franchise model, Mixue built up a network of 46,462 stores in China and 11 overseas countries as of December 31, 2024, up by 23.8 percent from one year ago. Notably, 1,609 franchised stores closed last year, 23 percent higher than in 2023.

There were at least 26 freshly-made tea drink brands competing with each other in mainland China as of 2024, but only eight of them saw their number of stores increase over the year.

Several of them applied for an initial public offerings overseas, including Hong Kong-listed Nayuki (2150) and Sichuan Baicha Baidao Industrial (2555) with Chagee opting for the US market.

Mixue was an IPO darling and its shares have jumped over 56.6 percent so far since its debut in early March.