Core Viewpoint - 85度C's parent company, 美食-KY, announced a strategic adjustment in its operations in mainland China, focusing on optimizing its operational scale by closing underperforming stores in specific regions [1][3][4]. Group 1: Operational Adjustments - 美食-KY plans to terminate operations in specific areas and stores in mainland China where profitability has consistently fallen below expectations [3][4]. - The company aims to enhance resource allocation in production, logistics, and operational support to improve overall efficiency and shareholder value in the long term [3][4]. Group 2: Store Closures and Market Impact - The current adjustment represents the largest scale of closures in nearly five years, with over 40 stores expected to close in mainland China [4]. - As of September 16, 2025, the number of operating stores in mainland China has decreased to 386, down from 467 in October 2024, indicating a reduction of 81 stores [4]. Group 3: Financial Performance - 美食-KY reported a revenue of approximately 137.7 billion New Taiwan Dollars (NTD) for the first three quarters of this year, a decrease of about 2% compared to the same period last year [6]. - In the first half of this year, revenue from mainland China fell by 11.08% to 35.22 billion NTD (approximately 8.22 billion RMB), while overall revenue increased by 1.32% to 94.53 billion NTD [6]. Group 4: Brand and Competitive Challenges - The decline in revenue in mainland China is attributed to brand aging and a decrease in product competitiveness, leading to a significant drop in store performance [8][9]. - The lack of appealing new products and a declining brand presence have contributed to the challenges faced by 85度C in the competitive landscape [8][9].

Core Viewpoint - 85°C, a subsidiary of Meishi-KY, is adjusting its operational strategy in mainland China by closing underperforming stores, with an expectation to close over 40 stores this year, while maintaining confidence in the market [1][2][3]. Group 1: Operational Adjustments - The board of Meishi-KY has decided to optimize its operational scale in mainland China, terminating operations in specific regions and stores where profitability has consistently fallen below expectations [2][3]. - The company aims to enhance resource allocation in production, logistics, and operational support alongside the store closures, which is expected to improve overall resource efficiency and shareholder value in the medium to long term [2][3]. Group 2: Financial Performance - 85°C has experienced a significant decline in revenue in mainland China, with a reported 11.08% decrease in revenue to approximately 35.22 billion New Taiwan Dollars (about 8.22 billion RMB) in the first half of the year [6]. - The overall revenue for Meishi-KY in the first three quarters was approximately 137.7 billion New Taiwan Dollars, reflecting a 2% decrease compared to the previous year [6]. - In 2024, revenue from mainland China is projected to drop by 22.19% to 80.53 billion New Taiwan Dollars, following a 0.25% decline in 2023 [6]. Group 3: Market Dynamics - 85°C's store count in mainland China has decreased from 467 to 386, a reduction of 81 stores, with a significant concentration in the East China market, particularly in Jiangsu, Shanghai, and Fujian [4][5]. - The brand is facing challenges due to aging brand perception and declining product competitiveness, leading to a lack of appealing new products and ultimately resulting in decreased store performance [8][9]. - The competitive landscape in the bakery sector is characterized by regional traits, which complicates supply chain management and may increase operational costs due to reduced scale effects from store closures [9].