Xiangpiaopiao, the packaged milk‑tea brand long billed as “China’s first milk‑tea stock,” reported a sharp deterioration in profitability for 2025, underscoring the strains facing legacy beverage names as consumer tastes shift. The company told investors it expects net profit attributable to shareholders of just RMB 102–125 million for the year, a fall of roughly 50–60% versus 2024, with adjusted net profit after non‑recurring items of only RMB 77–95 million.
Revenue also contracted: Xiangpiaopiao forecasts sales of about RMB 2.927 billion (29.27亿元) in 2025, a drop of approximately 11% year‑on‑year. Management attributed the deterioration mainly to weaker sales of its traditional brewed/instant products, which remain highly seasonal and reliant on concentrated windows of demand around the lunar new year.
The firm's 2025 results mark a continuation of a multi‑year slide. Revenue has retreated toward levels last seen before 2018 and profits are at near‑13‑year lows; after peaking in 2019 with RMB 3.978 billion in revenue and RMB 347 million in net profit, the business has struggled to regain momentum. Shares have reflected that loss of confidence: market value has evaporated from a peak above RMB 150 billion to roughly RMB 53.5 billion as of early March 2026.
Xiangpiaopiao has tried to break free of the seasonality problem by diversifying. It entered the ready‑to‑drink (RTD) juice tea market with its Meco line in 2017 and opened two fresh‑made tea shops in Hangzhou in 2025, signalling a push into the higher‑growth freshly made tea segment. The company also disclosed plans in December to invest about RMB 268 million to acquire land and build an RTD plant in Thailand to serve ASEAN markets.
Those initiatives carry meaningful execution risk. The RTD business—once a promising new channel—has proved volatile, sliding to around RMB 600 million at one point amid tougher market conditions and internal operational issues. Southeast Asia is a crowded and price‑sensitive beverage market; establishing production, distribution and brand recognition there will require sustained investment and time, and is unlikely to deliver quick relief for near‑term earnings.
Investor nerves have been heightened by shareholder financing moves. A holder owning more than 5% of shares postponed the buyback of previously pledged stock and added a further pledge of 4.83 million shares, bringing his cumulative pledged holdings to 15 million shares (about 3.63% of total shares). While the company framed the pledge as a rollover rather than new financing, such activity tends to amplify market concern about insider liquidity and governance when a company is underperforming.
The Xiangpiaopiao story is emblematic of a broader challenge for China’s packaged beverage incumbents: entrenched brands built on supermarket distribution face structural pressure from fresher, experience‑driven rivals and shifting consumer preferences. For investors and managers alike, the central questions are whether Xiangpiaopiao can translate brand recognition into competitive fresh‑drink formats, execute an expensive overseas expansion prudently, and stabilize margins long enough to rebuild confidence in its shares.