Core Viewpoint - The stock price of Mixue Ice City has experienced a dramatic decline, losing HKD 500 billion in market value within three months, raising concerns about its sustainable growth and management issues [1][3][5]. Financial Performance - For the first half of 2025, Mixue Ice City reported revenue of RMB 14.87 billion, a year-on-year increase of 39.3%, with gross profit of RMB 4.71 billion, up 38.3%, and net profit of RMB 2.72 billion, reflecting a growth of 44.1% [4][5]. - The company's earnings per share increased by 38.2% to RMB 7.23 compared to the previous year [4]. Market Dynamics - The surge in sales was initially supported by high subsidies from food delivery platforms, which have since begun to taper off, leading to a slowdown in growth [5][6]. - The management acknowledged that reliance on external subsidies for growth is unsustainable, indicating a need for strategic transformation [5][11]. Management Challenges - The rapid expansion to over 53,000 stores has introduced significant management challenges, particularly concerning food safety and quality control [7][9]. - Recent food safety incidents have raised consumer complaints, highlighting the need for a robust management system to ensure compliance and quality across all franchises [9][10]. Strategic Shift - The company must transition from a focus on scale to prioritizing quality, emphasizing product innovation and supply chain efficiency to maintain competitiveness [11][13]. - Proposed strategies include enhancing supply chain capabilities, reducing costs through centralized purchasing, and implementing stricter franchise management practices to ensure food safety [14][15]. Consumer Trust - Rebuilding consumer trust is critical, necessitating a rapid response mechanism for complaints and transparent communication regarding corrective actions [15][16]. - The long-term success of Mixue Ice City will depend on its ability to address current growth anxieties and management vulnerabilities while maintaining a commitment to quality [16].