CMSC: First coverage of MIXUE GROUP (02097) with a buy rating, overseas markets expected to open up new growth opportunities.

CMSC released a research report stating that MIXUE GROUP (02097) is expected to achieve operating income of 38.26/42.32/46.01 billion in 2026-2028, with a year-on-year growth of +14.0%/+10.6%/+8.7% respectively. The company is expected to achieve a net profit attributable to shareholders of 6.47/7.30/7.98 billion in 2026-2028, with a year-on-year growth of 9.9%/12.8%/9.2%. Mixue has a supply chain barrier and cost advantage. It has a large space for store openings in lower-tier cities and overseas markets. By 2026, the takeaway business is gradually declining, and the company's price advantage is expected to be highlighted. In addition, the launch of the new freshly ground coffee brand can effectively support same-store sales. Investors are recommended to pay attention to this stock. The initial coverage gives it a "hold" rating. CMSC's main points are as follows: In 2025, Mixue Ice City benefited from the takeaway bonus and the rapid expansion of stores, achieving impressive revenue and profit performance. The company has built a core barrier with an integrated supply chain, and synergistically developed multiple brands such as Mixue Ice City, Clever Coffee, and Fresh Deer House. At the same time, overseas expansion continues to advance, and there is ample room for long-term growth. By 2026, as the takeaway business gradually declines, the company's price advantage is expected to be highlighted. Coupled with the launch of the new main brand freshly ground coffee, it can effectively support same-store sales. Investors are advised to pay attention to this. The takeaway bonus combined with rapid store openings resulted in impressive revenue and profit in 2025. In 2025, Mixue achieved operating income of 33.56 billion, a year-on-year growth of 35.2%, driven by a 26% increase in the number of stores and a 7% increase in per store revenue to 616,000 yuan. In the second half of the year, revenue was 18.69 billion, a year-on-year increase of 32.0%, showing steady operations. Mixue opened 14,496 stores in 2025, with an additional 1,354 from the acquisition of Fresh Deer House and the closure of 2,527 stores. The net increase in openings was 13,323 stores, a significant increase from 2024. Mainly benefiting from the scale expansion of Clever Coffee, by the end of the year, there were a total of 59,785 stores, with a per-store revenue of 630,000 yuan, a year-on-year increase of 7%. In terms of profitability, the overall gross profit margin was 31.6%; net profit attributable to shareholders was 5.89 billion, a year-on-year increase of 32.7%, with a net profit margin of 17.5%, and a slight optimization of operating expenses. Strong supply chain barrier, multi-brand matrix expanding the market. Relying on an integrated supply chain, Mixue has built a long-term barrier, with a self-production rate of core raw materials exceeding 60%. Scale procurement, production, and logistics significantly reduce costs, with material costs 10%-30% lower than peers, supporting ultimate cost-effectiveness. At the same time, it has created a three-brand matrix including Mixue Ice City, Clever Coffee, and Fresh Deer House, covering all demographics, time periods, and scenarios, leveraging channel and operational capabilities to open up growth space. In terms of overseas markets, Mixue has entered 13 countries with 4,467 stores. In 2025, due to short-term closures in the Southeast Asia market, there was an adjustment, but with standardized products, a strong supply chain, and high cost-effectiveness advantages, combined with universal taste acceptance, there is ample room for long-term international expansion. Risk warning: Risk of macroeconomic downturn; risk of store expansion speed falling short of expectations; risk of intense market competition.