Mixue Group, the undisputed titan of China’s budget beverage market, has unveiled its first full-year scorecard since its 2025 IPO. Despite a cooling consumer landscape, the company reported a staggering 33.56 billion RMB (approximately $4.65 billion) in revenue, a 35.2% year-over-year surge. While net profits climbed to 5.88 billion RMB, the market’s reaction was tellingly muted, with share prices sliding over 17% in the three days following the announcement.
In a surprising strategic pivot, the group also announced a major leadership reshuffle. Zhang Hongfu, the longtime CEO and a key architect of the brand's culture, has stepped into the role of co-chairman. Replacing him is 35-year-old Zhang Yuan, a former CFO with a background in private equity at Hillhouse and Bank of America Securities. This transition signals a shift from the founder-led era of relentless expansion toward a more disciplined, finance-driven management style.
The new CEO’s immediate challenge is addressing the fallout from China’s brutal "delivery wars." Zhang Yuan candidly admitted that while the company excelled at offline foot traffic, its digital infrastructure lagged behind competitors during a period of massive online subsidies. As consumer behavior shifts permanently toward delivery platforms, Mixue’s traditional strengths in storefront operations are being tested by declining profit margins and store-level efficiency issues.
Mixue’s business model remains that of a "shovel seller" rather than a simple tea vendor. Nearly 98% of its revenue is derived from selling equipment and raw materials to its massive network of nearly 60,000 franchisees. However, this reliance on supply chain volume is hitting a ceiling as the brand saturates China’s lower-tier cities. With over 58% of its domestic stores now located in third-tier cities or below, the company is increasingly forced to look toward diversification.
To sustain its momentum, the group is aggressively expanding its footprint into coffee via the "Lucky Cup" brand and has recently moved into the beer market through the acquisition of Fulu Beer. This multi-brand strategy, combined with a pivot toward "quality over quantity" in store expansion, represents a high-stakes bet. The Snow King’s future now rests on whether its low-cost supply chain can be successfully exported to new categories and digital-first sales channels.