Western Securities Co.,Ltd. has upgraded Mixue Group (02097) to a "Buy" rating, anticipating that the expansion of its main brand in overseas markets will exceed expectations. The accelerated store openings of Lucky Cup are unleashing economies of scale. The firm is optimistic about the company's robust supply chain and store operation capabilities underpinning its extreme value-for-money proposition, coupled with the continuous release of its brand effect. Consequently, it has raised its profit forecasts for the company, projecting net profits attributable to parents of 6.1 billion, 7.0 billion, and 8.1 billion yuan for 2025-2027, respectively. The current stock price corresponds to a P/E ratio of 25x, 22x, and 19x for those years. The key points from Western Securities' report are as follows: Mixue is accelerating its overseas expansion, with store performance surpassing expectations. In December 2025, Mixue Bingcheng opened three consecutive stores in the United States, entering two core cities: Los Angeles and New York. In terms of menu design, the US outlets have added three high-sweetness options (120%, 150%, 200%) and offer plant-based milks like oat and almond, emphasizing higher-frequency consumption items such as ice cream, lemonade, and smoothies to better align with local dietary habits and boost repurchase rates. Price-wise, major items are priced between $1.99 and $3.99, capped at no more than $5. Simultaneously, Mixue has intensified its promotional efforts to strengthen brand awareness, including advertising in key commercial districts and increasing social media exposure. The firm believes that the successful entry into the US market will help Mixue solidify its international recognition and effectively propel expansion into other countries. In mid-November 2025, Mixue launched an exclusive channel for overseas franchising, opening recruitment in 16 countries and regions abroad; specifically: 1) Southeast Asia is Mixue's core area for intensive store expansion. Taking Vietnam as an example, there is strong demand for cold beverages and significant room for growth in branded chain penetration. The total cost for a Mixue franchise store is approximately 1 billion Vietnamese dong (about 265,000 RMB). Leveraging local supply chain warehousing and distribution, a standardized franchise support system, and unified brand output, the company possesses advantages in stable quality and efficient management. 2) Markets such as Japan, South Korea, Australia, and South America represent potential opportunities. In May 2025, Mixue signed a procurement order for 4 billion coffee beans with Brazil and is expected to initiate the construction of a supply chain factory; the first store is scheduled to open in a São Paulo shopping mall in March 2026. Lucky Cup has surpassed 10,000 stores, with the opening of flagship stores releasing brand momentum. By December 2025, Lucky Cup's store count exceeded 10,000, and it simultaneously announced flagship store franchise standards. These flagship locations are targeted at prime spots in first-tier or provincial capital city core commercial areas, offering five product categories: regular beverages, special blends, ice cream, light desserts/snacks, and branded merchandise. With store areas exceeding 100 square meters to create a larger store image, the second growth curve continues to gain traction. Risk warnings include intensified industry competition, franchisee management risks, and potential underperformance of downstream demand.
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