Mixue Group, a leading Chinese ice cream and beverages chain, experienced a significant decline in its share price, falling more than 7% in Hong Kong on Friday. This marks the second consecutive session of losses, following an 8.37% drop on Thursday after the company reported a 14.7% year-on-year decrease in first-half profit to 2.32 billion yuan ($345.2 million) for the six months ended June. Despite the profit decline, Mixue's revenue increased by 2.3% to 15.22 billion yuan during the same period [1].
The company's profitability has been pressured by rising costs and expenses. Specifically, the cost of sales outpaced revenue growth, largely due to investments aimed at improving product quality. Selling and distribution expenses surged by 22.9%, driven by higher marketing and staff costs, while administrative expenses rose 39.4%, mainly due to increased staff costs [1].
Mixue proposed a special dividend of 2.65 yuan per share, pending shareholder approval [1]. The company continues to expand its global footprint, operating around 64,000 stores worldwide as of the end of June, including 4,378 overseas locations. Mixue has been actively entering new markets such as central Asia and the Americas, with plans to further deepen its presence in Southeast Asia and build a more localized supply chain to support overseas growth [1].
In addition to its core beverage business, Mixue is diversifying by developing its Snow King mascot into a global cultural brand through animated series, comics, movies, merchandise, and theme parks [1].
CONCLUSION
Mixue's recent profit decline and rising costs have led to a sharp drop in its share price, reflecting investor concerns over profitability. However, the company's ongoing global expansion and brand diversification initiatives signal a forward-looking strategy aimed at long-term growth. The market will be watching closely to see if these efforts can offset current cost pressures and restore investor confidence.