Ask AI · How will Miquan Ice Cream and Tea’s new CEO use financial experience to lead its transformation?

Author | Jolene

On the afternoon of March 24, Mixue Group released its first annual results report since listing on the HKEX. In 2025, Mixue Group’s full-year operating revenue was RMB 33.56 billion, up 35.2% year over year; net profit was RMB 5.89 billion, up 32.7%. Revenue beat expectations, while profit was slightly below expectations.

But the market’s attention was pulled away by another major development—along with the financial report came heavyweight personnel changes. The former CEO Zhang Hongfu was appointed Co-Chairman of the Board, and the deal maker would be Zhang Yuan, the former CFO, who is 35 years old.

The earnings report was released at noon and the market closed in the afternoon; capital market sentiment was strong. Shares rose to HK$341.8 per share, up 5.95%, but later that evening, at the performance briefing session, the newly appointed Zhang Yuan was candid about the impact of the delivery-battle on Mixue and the shortcomings of its online capabilities:

1、After delivery subsidies began to roll back, store sales growth slowed;

2、Orders shifting online reduced the effective receipt rate, thereby causing a decline in stores’ profitability;

3、Fewer customers for in-store dine-in reduced a major impact on the offline operating model the company is strong at;

4、In 2026, store sales and profitability will face some pressure; in the first quarter alone, challenges such as weak performance from winter new products and insufficient online marketing were already felt.

After the news broke, on the 25th Mixue Group’s share price saw a cliff-like drop, then continued to slide. Although that day Credit Suisse (CITIC) Lyon’s report raised the target price to HK$424 and rated it “outperform,” by the close of trading on March 26, Mixue Group’s share price had already fallen to HK$300.6 per share.

For Mixue Group, this may not be the best time to announce changes and point out shortcomings proactively. In the tea beverage industry, Mixue’s first company to release an annual report drew the most attention—this was also the group’s first annual results since going public. In the short term, the share price drop and panic sentiment were almost foreseeable, but this giant ship still announced it was turning course.

With nearly 60,000 stores, Mixue Group realizes it has reached a crossroads.

Previously, the capital market’s favor toward Mixue was built on striking big, sprinting forward with impressive figures and quick conversion efficiency. But starting from last year’s mid-year report, Mixue Group repeatedly mentioned a plan: “a century-old brand,” and began to do painful self-correction: handling the inefficiencies and overlapping locations left behind by its earlier irrational expansion, upgrading ingredients that were considered “affordable also equals cheap,” and looking for new marketing approaches beyond Snow King—the “most cost-effective spokesperson”…

Mixue is flipping every move that has helped it achieve success to look for hidden risks, hoping to find solutions before problems rise onto the pages of the report—and to map out an entirely new blueprint to drive growth.

In fact, before Zhang Yuan proactively mentioned this, there were not many reports in the market about negative impacts of the delivery battle on Mixue Bingcheng.

The full-year 2025 report shows that Mixue Bingcheng’s core brand is still a stable and efficient cash-printing machine: revenue grew 35.2%, gross margin grew 29.7%, and all key metrics increased steadily in parallel. Ultimately, the company recorded full-year profit of more than RMB 4.45 billion, up 33.1%.

But on closer inspection of the financials, the second-half performance did slow relative to the first half. While revenue beat expectations, net profit growth failed to keep up with revenue growth.

Both the financial report and the briefing session provided explanations. Part of the slowdown came from volatility in raw materials and revenue structure; another part came from the aftershocks of the delivery battle.

Although the delivery battle in 2025 has already ended, it left behind a lasting change: consumers’ ordering mindset on the big delivery platforms has formed. This has spread beyond delivery scenarios to offline “pick up at store” ordering. Many people no longer open the brand’s own mini-program; instead, they choose to place orders with coupons through delivery platforms, and after informing the rider of the situation, they pick up in person. Delivery platforms such as Flash Buy have also introduced in-store pickup modes.

Mixue Bingcheng believes this will bring structural challenges: foot traffic is moving to arenas Mixue isn’t good at, and Mixue needs better digital operating strategies.

The briefing said that in 2026, Mixue Group expects to invest three hundred million in resources, focusing on marketing, mini-program and app, space experience, visual upgrades, and packaging material upgrades. It hopes to reduce as much as possible the friction between seeing Snow King and placing an order—such as add-on bundles and price comparisons—by optimizing the user experience of its own mini-programs, and to regain its position in the ordering channel from the big delivery platforms.

But actually, Mixue is a brand that is more inclined toward an offline model. In the delivery platform scenario, the representative single-cup low price usually requires ordering 2–3 cups to reach the minimum order requirement. Data shows that its online revenue accounts for only about 30%.

And it is precisely because of its offline strength that, during the delivery subsidy war, Mixue was not displaced out of a large portion of the market share just because it reacted more slowly than comparable products. After the rush to follow the trend, because Mixue’s unit price is relatively low, the红包 available to most people are limited as well, so the money the brand burns may not be as much as what some aggressively investing competitors spend.

Therefore, Zhang Yuan described this reflection and change as a “fair-day repair of the roof,” not a “response.” For Mixue Bingcheng, the lessons from the delivery battle may be closer to the discomfort you feel after getting vaccinated.

On the marketing front, Mixue also announced a new plan. It hopes to use multi-dimensional approaches such as top-tier celebrity endorsement, cross-industry partnerships, short drama integrations, IP co-branding, and breaking into new categories. The mini-programs and apps will revolve around interactive experiences, fast purchasing, and optimizing functions for value-for-money. For example, when the Yoyo Ice Coconut series was launched in March, the “Yoyo Coconut Welcomes Spring” campaign was launched in sync.

This strategy is somewhat counterintuitive.

Typically, Mixue’s online marketing is seen as a model of “spending little to do big things.” When Snow King, the “cheapest spokesperson,” turns around, it can trigger a wave of internet memes. But judging from Mixue’s subsequent plans disclosed in its briefing, Mixue has already decided to go on multiple fronts at once. In other words, Mixue Bingcheng hasn’t just relied on Snow King as the top-tier lucky mascot created by sheer virality; it wants to add more reasons why consumers “must order Mixue for this one.”

As for the slowdown in growth, one not entirely unexpected factor is seasonality. For Mixue Bingcheng, which has relatively fewer hot-drink products, the cold winter has always been the off-season.

As the weather warms up, the product team is ramping up again. The Longjing tea and green-tea-cake series that previously had good response have returned. The Honeydew melon series limited to flagship stores has begun migrating to ordinary stores. The coffee products like True Orange Americano, which also come out of the flagship stores, have also been launched nationwide.

Mixue Bingcheng Zhengzhou flagship store menu

A Mixue Bingcheng store’s mini-program in Beijing

Image source: Mixue Bingcheng’s official Xiaohongshu account

On the store-count front, the CEO of the China regional division, Ma Junwei, said that the group will focus more resources on operational support for existing stores and improving their efficiency and returns. Previously, Mixue had repeatedly sent signals of slowing down expansion. This sentence is a clear declaration of an emergency brake.

In its report, Mixue Group’s mainland stores reached 55,000, net adding more than 10,000 stores. The added growth mainly came from deeper penetration in lower-tier cities. However, the closure rate has risen slightly versus the past—from 1,609 stores in 2024 to 2,527 stores.

In June 2025, Mixue Bingcheng adjusted its franchise policies and proactively slowed the store-opening pace. On one hand, site approval has become stricter; it encourages development through special channels such as schools, scenic spots, and transportation hubs. On the other hand, it selects the “best among the best” among franchisees, leaving more opportunities to operators that have already been verified—for example, letting them open flagship stores in a tea beverage + IP retail format.

The first Mixue Bingcheng Zhengzhou headquarters flagship store opened in January 2025. According to data disclosed in the briefing, the flagship store’s total foot traffic for the full year exceeded 5.7 million person-times. In the flagship store, the share of peripheral products exceeded 80%. There were also Snow King “Mongli” priced at RMB 1.5, as well as an oversized Snow King mechanical figure priced at RMB 189—making the average ticket price and profit comfortably exceed those of a cup of tea and a cup of ice cream. The flagship store’s total operating revenue for the full year exceeded RMB 98 million.

Mixue clearly plans to turn tea beverage + IP peripheral retail into a replicable new store format. By year-end, the flagship stores had been established in 23 cities nationwide, not only Tier-1 and new Tier-1 cities; cities such as Zibo and Baoding also have coverage.

Overseas stores have also entered a period of adjustment. The report shows that the number of Mixue Bingcheng’s overseas stores decreased by more than 400. Mixue’s explanation is that the brand is concentrating on optimizing existing stores in Indonesia and Vietnam. After clearing the inefficient and overlapping stores left behind by its early “grab market share by rapid expansion,” it will continue to expand and optimize local franchise networks. Mixue Group’s next overseas focus will still be Southeast Asia, but the path will shift from “first open to scale” to “first improve efficiency.”

Cutting costs is not as good as opening new sources. Mixue Bingcheng’s task is to stabilize. Whether Mixue Group can still have peaks may still depend on whether Lucky Coffee and the newly acquired Fulu Family can achieve something.

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Over the past year, Lucky Coffee has been the typical example of doing big things quietly.

Although its online buzz is far less than Mixue Bingcheng’s, Lucky Coffee’s store performance has exceeded expectations. Last year, it became the third coffee brand with 10,000+ stores after Luckin and Luckin? (Cudi). Narrow Gate Restaurant Eye data shows Lucky Coffee’s stores achieved a net growth rate of 57.86%. Among the more than 7,000 new stores Mixue Group added in total for the year, Lucky Coffee contributed more than 4,000. While growing at high speed, its store survival rate still remained at 88.6%.

2025 was a year of expansion for Lucky Coffee. In June, Lucky Coffee released targeted support policies for加盟商 in Beijing, Shanghai, Guangzhou, Shenzhen, and Chongqing, Tianjin. For franchisees in these cities, it exempted them from two years of franchise fees, management fees, and training fees—an unmistakable signal: after getting firmly established in lower-tier cities, Lucky Coffee has begun to push upward and confront competitors directly, such as Luckin.

A chart of Lucky Coffee store growth data; data from Narrow Gate Restaurant Eye

Changes on the product side are also significant. Reports suggest Lucky Coffee has switched to sharing the same R&D team with Mixue Bingcheng. In 2025, Lucky Coffee’s pace of launching new products increased significantly. It rolled out more than a dozen fruit coffee products priced at 6–8 yuan and nearly ten milk coffee products priced at 9–10 yuan. Its flagship stores also launched pour-over coffees priced at 10–16 yuan, reinforcing the brand’s perception of “affordable freshly ground coffee.”

At present, the strongest growth driver for Lucky Coffee may be the fruit coffee series: “True Fruit Coffee.” In the month since its launch, sales exceeded RMB 100 million. Some store staff said that in the updated operations manual, the coffee liquid used for fruit coffees has changed from cold brew to on-site concentrated extraction, which helps with inventory management and makes the flavor richer.

At the briefing, Mixue Group said it plans to add fresh fruit processing workshops and deep-processing plants in 2026, such as for oranges, coconuts, strawberries, and passion fruits, upgrading cold-chain warehouse and distribution delivery support. Lucky Coffee’s China regional CEO Pan Guofei said Lucky Coffee will reuse Mixue’s mature warehouse and distribution network, as well as successful practices in fresh fruit supply and re-mixing of raw materials. It’s clear that the fruit coffee series can directly benefit from Mixue Group’s “fresh fruit upgrade.”

On marketing, after signing JUNKAN?? (Wang Junkai) as spokesperson, Lucky Coffee’s official account has posted related activities almost every month—red envelope cover designs, new video releases, giveaways for personally signed peripherals during signature weeks, birthday events, offline gatherings… The battle of traffic delivered seems not to fall behind that of competitors who do frequent co-branding.

Not long ago, Mixue Bingcheng began adding coffee categories to its menu, which made many worry that Lucky Coffee might become a discarded asset within the group.

But based on the current situation, most coffee items inside Mixue Bingcheng stores are mainly best-selling products validated at the flagship stores. More diverse coffee new items are still being launched under Lucky Coffee. Ironically, Mixue Bingcheng’s stores may, to a certain extent, play the role of “traffic acquisition,” sparking more people’s curiosity to try “other coffees under Snow King’s brand,” which leads them to Lucky Coffee.

Pan Guofei also said at the performance meeting that the group will adopt a “dual-brand, coordinated development” layout: Mixue Bingcheng focuses on tea beverages, with coffee as a menu supplement. Lucky Coffee focuses on freshly ground coffee to meet professional coffee needs.

For Mixue Group’s outlook, Fulu Family may be an even earlier and more imagination-friendly variable.

After Mixue Group acquired it in 2025, by the end of February this year, Fulu Family stores had already surpassed 2,000. More than half are in lower-tier cities. When the outside world believed that Mixue Group would replicate the “beer version of Snow King” store-opening path, what was unexpected was that at the launch event, Fulu Family said it would slow down store expansion and focus on improving store performance, while also planning flagship store and brewery construction in parallel.

What might be behind this decision is a lesson learned from Snow King itself. When a rapid jump in store numbers raises the base size, if the supply chain, supervision, and site selection models are not upgraded in step, the risk of closures could become concentratedly exposed in newly opened high-density areas—this would deal a heavy blow to franchisees’ confidence.

Currently, Fulu Family’s official website offers 18 SKUs, priced at 6–10 yuan, covering fresh beer and innovative fruit-flavored beers, including fruit beer, beer-tea? (tea beer?), and milk beer. In offline stores, prominent signage says “freshly tapped craft beer; free samples.”

Last week, Fulu Family signed Jay Chou? (Lu Han) as its global spokesperson, sparking a round of controversy over whether “trendiness and value for money” can coexist. But looking closely at the SKUs and consumption data provided by Narrow Gate Restaurant Eye, among the top ten recommended products by consumers, only one is IPA; the rest are creative-flavor alcoholic drinks, and the #1 also has a fruit flavor—“Sweet and Sour Passion Fruit.”

In other words, Fulu Family is not trying to make beer a necessity for every customer. It is targeting customers who care about value for money and the quality of beer itself, but is even more oriented toward a younger crowd that’s more willing to try new things. Fulu Family may even be their “first cup of beer.”

Fulu Family’s current SKUs are more like single-cup “small sweet drinks” or “pretty alcoholic drinks” derived from milk tea—more suitable for takeaway and one-person drinking. People who want alcohol might use a beer cup to take a few rounds, but in Fulu Family’s model, it’s rare for anyone to order three or four cups at once. The store design also isn’t like a lounge that encourages lingering social time; it is better suited for point-to-point delivery.

As long as the flavors are adjusted to be common and mainstream enough, and the marketing is in place, just like no one would dig into the quality of Lucky Coffee’s beans, no one would be too picky about the quality-to-price ratio of Fulu Family’s IPA. Following Lucky Coffee’s example, if Fulu Family signed Lu Han, it would likely also “make full use” of the asset through high-frequency interactions to capture market share.

However, whether it’s Lucky Coffee or Fulu Family, they face the same problem: celebrity spokesperson marketing far outweighs product marketing. Although the two have had some single products with excellent performance, neither has yet produced a truly breakout hit product that catches on broadly.

In 2025, Mixue Group’s R&D spending still stayed around 0.3%, which was further reduced by three million yuan compared to last year. Compared with digitalization, Mixue Group may need more urgently a new, irreplaceable breakout product comparable to an iconic “fresh-lemon soda you can’t miss” or “fresh orange soda you swing down with sticks”—no matter whether it emerges from Mixue Bingcheng, Lucky Coffee, or Fulu Family.

New CEO Zhang Yuan is 35 years old. He joined Mixue Group just over three years ago and previously worked at multiple financial institutions, including BofA Securities and Hillhouse Investments. A figure from the capital markets taking over the operations from the founder naturally indicates the group’s judgment about the next stage: high growth will continue, but the scale has already topped out. What Mixue needs is no longer just the speed of opening stores, but the building and management of scale itself.

Mixue was founded in 1997. Approaching its 30th year, the company repeatedly uses the phrase “building a century-old brand” in both its half-year report and this report. With its base business stable, Mixue Group is trying to make preparations from three directions: upgrading products and the supply chain, digital operations, and organizational iteration within the company. Expansion tasks are handed to Lucky Coffee, while Mixue, Fulu Family, and overseas stores all signal a slowing of store expansion speed and an effort to optimize the supply chain and products.

Product upgrades are the most visible, tangible changes. As mentioned earlier, the group plans to add fresh fruit processing workshops such as oranges, coconuts, strawberries, and passion fruits, replacing some frozen fruit raw materials with fresh fruit. Mixue Bingcheng’s core best-seller, “Mango? (not in text: stick-mashed fresh orange),” has upgraded from ambient-temperature orange-youz paste to frozen blended orange juice. Ambient milk and coconut cream are switching to low-temperature fresh milk and chilled coconut cream, and supporting cold-chain logistics will follow accordingly.

In March this year, Mixue piloted 19-day shelf-life fresh active cold-chain fresh milk and new fresh coffee beans with a 60-day shelf life in pilot cities. In those pilot cities, the average daily number of cups sold was up 13% versus other cities.

This is a high-cost chess move. In the briefing, the new CEO expected that to promote raw material and capacity upgrades while maintaining its price advantage, the gross margin would decline somewhat, but it would persist in staying stable in the long term at around 30%.

Beyond tea beverages, IP and retail are becoming another layer of moat. Mixue Group has turned the animated film “Snow King Comes to Town” into five language versions—English, French, Portuguese, and others—and distributed it globally.

Previously, Mixue’s recruitment process for positions on boss直聘—such as theme park engineering management, performance coordination, and content scriptwriting—had already ended. The briefing also announced that Mixue will build a small indoor Snow King theme park at its Zhengzhou headquarters, with an investment of less than 100 million yuan. The scale is not big, but the intent is clear.

Currently, Snow King’s long-term IP content building hasn’t fully landed yet, but Snow King is still the only clearly successful owned IP in the tea beverage industry. With its friendliness that makes people see it more, doing more creative things, and being more absurd, it can capture consumers’ emotions and compensate for the natural lack of customer loyalty in the low-price segment. At present, “a group of Snow Kings dancing at the entrance” is still a globally common low-cost customer acquisition method, and “turning Snow King cultural creativity into ‘Gumai’” would still attract people who may not even drink Mixue Bingcheng to buy Snow King cultural creativity.

At the briefing, the new CEO Zhang Yuan said: “The team needs people who keep their heads down to run, and people who lift their heads to look at the road ahead, and also people who look up to the stars.”

Over the past three decades, Mixue Bingcheng built 45,000 stores by keeping its heads down and moving forward. For the problems on this road next, once you’re low and looking down, you can no longer see them. What the market will test next is whether this franchise tea beverage company that started in Xuchang, Henan can truly learn a different way to grow.

The answer will take time, but at least the questions have been asked correctly.