Core Viewpoint - The report from CICC maintains a "outperforming the industry" rating for Mixue Group (02097) with a target price of HKD 555, corresponding to a P/E of 32/28x for 25/26, indicating a potential upside of 35% [1] Group 1: Integrated Supply Chain Capability - The company is enhancing its integrated supply chain capabilities, consolidating quality-price ratio and scale flywheel effects [1] - On the procurement side, the company is globally sourcing and collaborating deeply with major suppliers, reducing costs through scale effects, with planned purchases of 11.5k tons of lemons, 2.7k tons of fresh oranges, 6.1k tons of tea leaves, and 1.3k tons of coffee beans in 2024 [1] - The company is improving factory automation to optimize product taste and has established 29 domestic warehouses, along with localized storage systems in Vietnam, Indonesia, Thailand, and Malaysia, achieving over 90% coverage of county-level administrative regions in mainland China within 12 hours [1] - The company has developed an intelligent dispensing machine to enhance store operational efficiency, reducing service time from over 20 seconds to 8-10 seconds, with 4,000-5,000 units currently deployed [1] Group 2: Impact of Delivery Subsidies - The company estimates that delivery subsidies contributed to a 13% year-on-year same-store sales growth in H1, with delivery revenue share increasing by approximately 10 percentage points [2] - Considering the gradual weakening of delivery subsidies since July, the company anticipates a decline in same-store revenue growth in H2 compared to Q2 [2] - The company is expected to counter the impact of declining delivery subsidies through product innovation, offline marketing, and mini-program traffic [2] Group 3: Potential of Lucky Coffee and Overseas Adjustments - Lucky Coffee is leveraging Mixue's supply chain advantages to enhance fruit and coffee product innovation, with coffee product revenue accounting for over half of total revenue, and same-store growth expected to exceed the overall company growth of 13% in H1 [3] - The company has signed over 8,000 new stores nationwide as of August 27, with expectations to reach around 8,000 operational stores by year-end [3] - The overseas market is still in an adjustment phase, with higher gross margins compared to domestic operations, allowing the company to provide discounts while ensuring franchisee profitability remains within a reasonable range [3]

Core Viewpoint - Huaxin Securities initiates coverage on Mixue Group (02097) with a "Buy" investment rating, projecting EPS for 2025-2027 to be 15.11, 17.87, and 20.32 CNY respectively [1] Financial Performance - For the first half of 2025, Mixue Group reported total revenue of 14.875 billion CNY, a year-on-year increase of 39% [1] - The net profit for the same period was 2.718 billion CNY, reflecting a 44% year-on-year growth [1] - The attributable net profit reached 2.693 billion CNY, marking a 43% increase compared to the previous year [1] Profitability Metrics - The gross margin for the first half of 2025 decreased by 0.2 percentage points to 31.64% [1] - The sales and distribution expenses as a percentage of revenue increased by 0.04 percentage points to 6.14%, while administrative expenses rose by 0.3 percentage points to 2.94% [1] - The net profit margin and attributable net profit margin increased by 1 percentage point and 0.5 percentage points to 18.27% and 18.10% respectively, showing slight year-on-year growth [1] Strategic Focus - The company aims to enhance supply chain capabilities, build brand IP, and optimize store operations, while accelerating expansion in domestic and overseas markets [1]

Core Viewpoint - Huaxin Securities initiates coverage on Mixue Group (02097) with a "Buy" investment rating, projecting significant earnings growth through 2027 [1] Financial Performance - For the first half of 2025, Mixue Group reported total revenue of 14.875 billion yuan, a year-on-year increase of 39% [1] - The net profit for the same period reached 2.718 billion yuan, reflecting a 44% year-on-year growth, with attributable net profit of 2.693 billion yuan, up 43% [1] - The gross margin slightly decreased by 0.2 percentage points to 31.64% [1] Expense Analysis - Sales and distribution expenses as well as administrative expenses increased as a percentage of revenue, rising by 0.04 percentage points and 0.3 percentage points to 6.14% and 2.94%, respectively [1] - It is anticipated that these expense ratios will stabilize in the second half of the year [1] Profitability Metrics - The net profit margin and attributable net profit margin increased by 1 percentage point and 0.5 percentage points to 18.27% and 18.10%, respectively, showing slight year-on-year growth [1] Strategic Focus - The company aims to enhance its supply chain, build brand IP, and optimize store operations while accelerating domestic expansion and exploring overseas markets, which is expected to further boost performance [1]

[Corporate Information](index=3&type=section&id=CORPORATE%20INFORMATION) This section outlines the company's board structure, key committees, and essential contact details [Board and Committees](index=3&type=section&id=Board%20and%20Committees) The company's board, comprising executive and independent non-executive directors, is supported by audit, remuneration, and nomination committees - Board members include **Mr. Zhang Hongchao (Chairman)**, **Mr. Zhang Hongfu**, **Ms. Cai Weimiao**, **Ms. Zhao Hongguo** as executive directors, and **Ms. Pan Huiyan**, **Mr. Zhu Xi**, **Mr. Huang Xuande** as independent non-executive directors[4](index=4&type=chunk) - The **Audit Committee is chaired by Mr. Huang Xuande**, the **Remuneration Committee by Mr. Zhu Xi**, and the **Nomination Committee by Mr. Zhang Hongchao**[4](index=4&type=chunk)[5](index=5&type=chunk) [Company Details and Contacts](index=4&type=section&id=Company%20Details%20and%20Contacts) The company maintains its registered office and principal place of business in Zhengzhou, Henan, China, with a key operational presence in Hong Kong, alongside essential contact information - The registered office and China headquarters are located at Room 16004, Hanhai Beijin Commercial Center, Jinshui District, Zhengzhou, Henan Province, China[7](index=7&type=chunk) - The principal place of business in Hong Kong is Room 1912, 19th Floor, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong[8](index=8&type=chunk) - The auditor is **Ernst & Young**, stock code is **2097**, and the company website is **www.mxbc.com**[8](index=8&type=chunk)[10](index=10&type=chunk) [Financial Summary](index=6&type=section&id=FINANCIAL%20SUMMARY) This section provides a concise overview of the company's financial performance and position, highlighting significant growth in revenue, profit, assets, and equity for the reporting period [Financial Performance Highlights](index=6&type=section&id=Financial%20Performance%20Highlights) For the six months ended June 30, 2025, the company achieved significant growth in both revenue and profit, with a corresponding increase in basic earnings per share Financial Performance Highlights (For the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 14,874,809 | 10,677,054 | 39.3% | | Gross Profit | 4,706,373 | 3,402,695 | 38.3% | | Profit for the Period | 2,718,214 | 1,886,899 | 44.1% | | Basic Earnings Per Share (RMB) | 7.23 | 5.23 | 38.2% | [Financial Position Highlights](index=6&type=section&id=Financial%20Position%20Highlights) As of June 30, 2025, the company's total assets, total equity, and cash balances all significantly increased, with a notable improvement in net current assets Financial Position Highlights (As of June 30) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 27,292,904 | 19,783,322 | | Total Liabilities | 5,911,440 | 4,722,502 | | Total Equity | 21,381,464 | 15,060,820 | | Cash and Bank Balances | 12,498,290 | 7,617,853 | | Financial Assets at Fair Value Through Profit or Loss | 5,113,517 | 3,491,643 | | Net Current Assets | 12,690,577 | 7,379,213 | [Management Discussion and Analysis](index=7&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an in-depth review of the company's financial performance, business operations, and future outlook, highlighting key drivers of growth and strategic initiatives [Financial Review](index=7&type=section&id=Financial%20Review) The Group achieved strong financial growth in the first half of 2025, with significant increases in both revenue and profit, primarily driven by sales of goods and equipment and growth in franchise services, while maintaining a robust liquidity position and a low gearing ratio Financial Performance in H1 2025 | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 14,874.8 | 10,677.1 | 39.3% | | Gross Profit | 4,706.4 | 3,402.7 | 38.3% | | Profit for the Period | 2,718.2 | 1,886.9 | 44.1% | - Revenue growth was primarily attributed to **sales of goods and equipment (up 39.6% to RMB14,494.7 million)** and **franchise and related services (up 29.8% to RMB380.1 million)**, with the latter benefiting from store network expansion[16](index=16&type=chunk)[20](index=20&type=chunk) - Gross profit margin for **goods and equipment sales decreased from 30.5% to 30.3%**, mainly due to rising raw material costs and changes in revenue mix; **franchise and related services gross profit margin increased from 81.7% to 82.7%**, driven by economies of scale[18](index=18&type=chunk)[23](index=23&type=chunk)[25](index=25&type=chunk)[30](index=30&type=chunk) - Net other income and gains **increased by 96.0% to RMB158.6 million**, primarily from higher interest income and government grants[26](index=26&type=chunk)[31](index=31&type=chunk) - Sales and distribution expenses **increased by 40.2% to RMB913.7 million**, maintaining a 6.1% share of total revenue. Administrative expenses **rose by 56.6% to RMB437.7 million**, with its share of total revenue slightly increasing by 0.3 percentage points to 2.9%. R&D expenses **grew by 1.7% to RMB41.0 million**, with its share of total revenue remaining largely stable[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - Finance costs **decreased by 52.3% to RMB2.1 million**, mainly due to repayment of bank borrowings. Income tax expense **increased by 22.0% to RMB750.1 million**, primarily due to higher profit before tax[35](index=35&type=chunk)[36](index=36&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - As of June 30, 2025, total cash and cash equivalents, time deposits and restricted cash, and financial assets at fair value through profit or loss amounted to **RMB17,611.8 million**, representing a **58.5% increase** from the end of 2024, primarily driven by net cash from operating activities and proceeds from the Hong Kong public offering[38](index=38&type=chunk)[43](index=43&type=chunk) - As of June 30, 2025, the Group had **no interest-bearing bank and other borrowings**, and the **gearing ratio decreased from 23.9% at the end of 2024 to 21.7%**[39](index=39&type=chunk)[44](index=44&type=chunk)[50](index=50&type=chunk)[56](index=56&type=chunk) - As of June 30, 2025, capital commitments amounted to **RMB74.9 million**, primarily for the construction of production plants and acquisition of production equipment, a **significant decrease from RMB398.6 million** at the end of 2024[59](index=59&type=chunk)[62](index=62&type=chunk) - As of June 30, 2025, the total number of employees was **8,117** (end of 2024: 7,025), with total employee compensation expenses of **RMB897.8 million** (H1 2024: RMB600.7 million)[60](index=60&type=chunk)[63](index=63&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) As a leading global freshly-made beverage company, the Group achieved robust performance in H1 2025, expanding its global store network to over 53,000 outlets, while continuously strengthening its supply chain, brand IP, and store operations, and successfully entering the Central Asian market - The Group is a **leading global freshly-made beverage company**, offering high-quality, affordable fruit teas, milk teas, ice creams, and coffee, with an average unit price of approximately **RMB6 (about US$1)**[67](index=67&type=chunk)[69](index=69&type=chunk) - It operates two major brands, "**Mixue Bingcheng**" and "**Lucky Cup**", ranking **72nd globally** in the food and beverage industry by 2024 annual terminal retail sales[67](index=67&type=chunk)[69](index=69&type=chunk) - As of June 30, 2025, the global store network **exceeded 53,000 outlets**, covering China and 12 overseas countries[72](index=72&type=chunk)[7

Core Viewpoint - The tea beverage industry is experiencing a resurgence after a brief slowdown, with leading brands like Mixue and Guming showing significant revenue growth in the first half of the year [1] Industry Summary - The tea beverage sector has seen a recovery in growth after a 24-year period of slowdown, with a notable increase in revenue for top brands [1] - The revenue growth for leading brands such as Mixue and Guming reached approximately 40% year-on-year in the first half of the year [1] - The launch of major brands in early 2025 is expected to enhance the overall penetration rate of the tea beverage industry and increase foot traffic to stores [1] - The ongoing competition in the delivery sector has positioned tea beverages as a key subsidized category, further boosting sales per store [1] Company Summary - Guming (01364) shares rose by 4.55%, trading at 22.06 HKD [1] - Mixue Group (02097) shares increased by 3.52%, trading at 405.4 HKD [1] - Shanghai Auntie (02589) shares grew by 1.3%, trading at 124.8 HKD [1] - Cha Baidao (02555) shares saw a slight increase of 0.24%, trading at 8.34 HKD [1] - The strong performance of brands is attributed to the excellent single-store model of franchise outlets, indicating a robust future potential for these brands [1]

Core Viewpoint - The tea beverage industry is experiencing a resurgence after a brief slowdown, with leading brands showing significant revenue growth in the first half of the year [1] Industry Summary - The tea beverage sector has seen a recovery after a 24-year period of slowed growth, with major brands like Mixue and Gu Ming reporting approximately 40% year-on-year revenue growth in the first half of the year [1] - The launch of major tea brands in early 2025 is expected to enhance overall market penetration and increase foot traffic to stores [1] - The ongoing competition in the delivery market has positioned tea beverages as a key subsidized category, further boosting sales per store [1] Company Summary - Gu Ming (01364) shares rose by 4.55% to HKD 22.06, while Mixue Group (02097) increased by 3.52% to HKD 405.4, and Hu Shang A Yi (02589) saw a 1.3% rise to HKD 124.8 [1] - The strong performance of brands is attributed to the effective single-store model of franchise outlets, indicating that future brand momentum will heavily rely on this model [1]

Core Viewpoint - The report from Jianyin International highlights that the upcoming National Day Golden Week in China will significantly boost short-term consumption, particularly benefiting sectors such as tourism, dining, beverages, outdoor sports, and gold-related businesses [1] Group 1: Impact on Sectors - The Golden Week is expected to drive retail sales growth, with a notable increase during the overlapping period of the Mid-Autumn Festival and National Day in 2025, from October 1 to 8 [1] - Key sectors poised to benefit from the consumption surge include tourism, hospitality, retail, dining, jewelry, ready-to-drink beverages, and outdoor sports, driven by rising demand for services, cultural experiences, and leisure activities [1] Group 2: Policy Support - Recent national service consumption boosting policies and regional initiatives are anticipated to extend the consumption growth during the holiday period, creating short-term investment opportunities in the market [1]

Core Viewpoint - The shortage of lemons is impacting the production of lemon water at various stores of Mixue Ice City, leading to increased prices and supply chain challenges for the company [1][2][19]. Group 1: Supply Chain Issues - Mixue Ice City is experiencing a lemon supply shortage due to weather-related delays in imports and the need for local lemons to be stored for optimal taste [3][4]. - The average wholesale price of lemons in China has nearly doubled from 7.84 yuan/kg last year to 15.01 yuan/kg this year [5][6]. - The production of lemons in Sichuan's Anyue County, a major supplier, has decreased due to adverse weather conditions, affecting overall supply [10][12]. Group 2: Price Fluctuations - The price of fresh lemons has surged, with local processing company Citrus Love reporting a 50% increase in orders compared to last year, leading to a peak purchase price of 9.5 yuan/kg [16][21]. - Mixue Ice City has raised the price of lemon supplies to franchisees from 200 yuan per case to 255 yuan, reflecting the increased costs [22]. - The retail price of lemon water has also been adjusted in major cities, increasing from 4 yuan to 5 yuan in some locations [23]. Group 3: Demand Dynamics - The demand for lemons has surged due to the booming tea beverage market, exacerbating the supply-demand imbalance [15]. - Mixue Ice City sold approximately 1.1 billion cups of lemon water in the first nine months of 2024, making it the largest lemon purchaser in China with an estimated procurement of 115,000 tons [20]. - The company is exploring alternative sourcing strategies, including importing lemons and introducing new products to mitigate the impact of rising costs [25].

Group 1: Industry Investment Rating - The report maintains a positive outlook on the overseas education sector, indicating a favorable investment rating due to the maturation of profit-oriented classification management and market reforms driving the expansion of higher education institutions [1][2]. Group 2: Core Insights - The conditions for profit-oriented classification management in private education are gradually maturing, with quality improvement in private schools being a crucial prerequisite for this transition. The report anticipates an acceleration in the implementation of profit-oriented policies for private schools, which will enhance the supply of higher education while ensuring quality [1][9]. - The establishment of profit distribution rights for private schools has led to increased certainty in asset returns. The average profit margin for the six listed private higher education companies is approximately 30.9%, with an average ROE of 12%. This indicates a robust commercial model that seeks to expand scale and revenue [2][10]. - The report highlights a significant mismatch between supply and demand in the higher education sector, with the number of college admissions only increasing from 10.36 million in 2021 to 10.69 million in 2024, while the number of high school graduates entering the college entrance examination has risen from 10.78 million in 2021 to 13.42 million in 2024. This has resulted in a declining college admission rate from 96.1% in 2021 to 79.6% in 2024 [2][10]. - The report suggests that the current quality standards achieved by listed private higher education companies will lay a solid foundation for the reintroduction of profit-oriented choices, which is expected to enhance the valuation of the higher education sector [2][11]. Group 3: Company Focus - The report recommends focusing on several key companies in the overseas education sector, including Yuhua Education, Zhongjiao Holdings, China Kepei, Neusoft Ruixin, Zhonghui Group, New Higher Education, Xijiao International Holdings, and Huaxia Holdings, as they are well-positioned to benefit from the anticipated policy changes [3][11][14].

Core Insights - There is a supply shortage of ice-fresh lemon water at multiple locations of Mixue Ice City, particularly in cities like Guangzhou and Shenzhen, where several stores have reported being out of stock for several days [1][2] - The company claims to sell over 1 billion cups of ice-fresh lemon water annually, with a significant contribution to its revenue, as it accounted for 15%-20% of total sales [1][2] Group 1: Supply Chain Issues - The shortage is attributed to a combination of factors, including the rapid expansion of Mixue Ice City stores, which has outpaced lemon supply [2] - Recent price increases in lemons have been noted, with the average wholesale price reaching 14.97 yuan per kilogram, nearly double the price from the previous year [2] Group 2: Company Response and Financial Performance - Mixue Ice City has acknowledged the supply issues, citing delays in imported lemons due to weather conditions and the current harvesting period for domestic lemons, which requires storage for optimal taste [2] - The company reported a revenue of 14.87 billion yuan for the first half of 2025, a year-on-year increase of 39.3%, and a net profit of 2.72 billion yuan, up 44.1% [1][2] - As of September 19, 2025, Mixue Group's stock price was 395 HKD, down 1.05%, with a market capitalization of 149.949 billion HKD, reflecting a 36% decline from its historical high of 618.5 HKD on June 5 [2]