Mixue Shares Fall as Concerns Over Margin Pressure Linger

Dow Jones03-25 10:55

By Tracy Qu

Shares of China's largest bubble tea and drinks chain Mixue Group fell in Hong Kong as concerns over margin pressure surfaced after its latest earnings report.

Shares dropped 4.9% to 325.40 Hong Kong dollars, equivalent to US$41.57, in Wednesday trading, underperforming the Hang Seng Index's 0.8% gain.

Daiwa analysts said its second-half 2025 results, released Tuesday, came largely in line with expectations, with a slightly lower gross profit margin offset by faster store openings.

However, an on-year decline in gross profit margin is seen to be likely in 2026, they said, citing a higher use of fresh fruit and milk, a rising mix of lower-margin coffee products and improved welfare for logistics employees, noting comments from management.

Daiwa lowered its target price for Mixue shares to HK$350.00 from HK$427.00 and kept a hold rating, saying it is waiting for signs of stabilizing gross margin and same-store sales growth.

Jefferies also cut its target price to HK$403.7 from HK$503 after lowering its earnings forecasts for 2026-27 by 9%-11%, citing slower store expansion and near-term pressure on revenue per store. Jefferies maintained a buy rating on the stock, given its dominant market position in China's freshly-made drink industry.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

March 24, 2026 22:55 ET (02:55 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.

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