Research Report on the Improvement of Mixue Ice City's Profitability through Supply Chain Integration in the New Tea Beverage Industry

Based on the above in-depth analysis, I will provide you with a comprehensive research report on

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Mixue Ice City (Stock Code: 2097.HK), as a leading enterprise in China’s new tea beverage industry, has built the world’s largest ready-to-drink beverage chain network[0]. As of December 2024, the number of the company’s stores has exceeded 46,000, covering more than 300 prefecture-level cities and over 1,700 counties across China, and has successfully expanded to 11 overseas countries and more than 500 cities, with the number of overseas stores reaching 4,800[1][2].

Core Indicators	Data
Number of Stores	46,000+ (World’s Largest)
Annual Cup Output	Approximately 9 billion cups (2024 Forecast)
Terminal Retail Sales	Over RMB 25 billion (2024)
Market Capitalization	Approximately HK$150 billion
2024 GMV	RMB 58.3 billion

Mixue Ice City’s core competitive advantage does not solely rely on brand marketing or store expansion, but rather its

. Through vertical integration of the entire chain including raw material procurement, production and processing, and logistics distribution, the company has built an irreplicable cost moat[1][2].

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Mixue Ice City’s supply chain integration covers the following four core dimensions:

Mixue Ice City sources high-quality raw materials directly from their origins through a procurement network covering 6 continents and 38 countries[2]. The company’s massive procurement scale has brought significant bargaining advantages:

Raw Material Category	2023 Procurement Volume	Cost Advantage
Lemons	115,000 tons	20%+ below industry average
Milk Powder	51,000 tons	10%+ below industry average
Oranges	46,000 tons	Significant cost advantage
Tea Leaves	16,000 tons	Significant cost advantage
Green Coffee Beans	16,000 tons	Significant cost advantage

Take lemon water as an example: Mixue Ice City procures lemons directly from Anyue, Sichuan, which not only ensures the freshness of raw materials but also reduces procurement costs to below 80% of the industry average[1].

Since 2020, the factory area of Mixue Ice City has grown explosively, rapidly expanding from 168,000 square meters in 2022 to 790,000 square meters in Q3 2024[1]. The company has built the largest and most comprehensive supply chain system in China’s ready-to-drink beverage industry, with 5 major production bases (annual comprehensive capacity of 1.65 million tons) and more than 60 intelligent production lines[2].

• Raw Material Cost Ratio
  : Only 30% (industry average 45%-55%)
• Beverage Ingredient Loss Rate
  : 0.71% (far lower than the industry average)
• Core Packaging Materials and Equipment
  : Independent production cost is 50% lower than outsourcing
• Liquid Dairy Products
  : The only ready-to-drink beverage enterprise in China that realizes independent production of fresh cow’s milk[2]

Mixue Ice City has built a three-level logistics structure of “Central Warehouse + Front Warehouse + Urban Distribution Network”[2]:

Warehousing Network	Coverage Capability	Delivery Frequency
27 Domestic Warehousing Centers (350,000 ㎡)	100% coverage of first-tier cities	2 times/week
	98% coverage of second-tier cities	1 time/day
	90% coverage of third-tier and lower cities	1 time/2 days
7 Overseas Warehousing Centers (69,000 ㎡)	560 cities in 4 Southeast Asian countries	Regional radiation delivery

This efficient logistics system enables Mixue Ice City to achieve:

, with unit logistics costs only 60%-70% of the industry average[2].

The company relies on digital technology to achieve large-scale and efficient operation of the supply chain, realizing intelligent management from raw material quality inspection, production process monitoring to logistics path optimization[2].

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Supply chain integration has brought significant cost advantages to Mixue Ice City, which are reflected in the following aspects:

Based on the chart analysis:

Cost Item	Mixue Ice City	Industry Average	Advantage Margin
Raw Material Cost	30%	50%	20 percentage points lower
Labor Cost	25%	20%	Slightly higher (can be diluted by scale effect)
Rent Cost	15%	15%	Flat
Other Costs	30%	15%	-

: Mixue Ice City’s raw material cost advantage is the most prominent, which directly translates into its price competitiveness in the terminal market[1][2].

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Mixue Ice City’s profitability has achieved significant improvement over the past five years:

Financial Indicator	2020	2022	2024	Growth Margin
Gross Profit Margin	28%	31%	32.5%	+4.5pp
Net Profit Margin	13.5%	16%	18.7%	+5.2pp
ROE	-	-	20.39%	-
Per-Cup Cost	Approximately RMB 1.5	Approximately RMB 1.2	Approximately RMB 1	-33%

: Cost optimization brought by supply chain integration is the main driver of profitability improvement. The net profit margin reached 18.7% in H1 2024, an increase of 5.2 percentage points compared to 13.5% in 2020. This impressive profitability fully proves the success of the supply chain strategy[1].

There is a strong positive correlation between Mixue Ice City’s store scale expansion and cost advantages:

Based on the chart data:

• Stores increased from 10,000 to 46,000
  : Cost advantage increased from 10% to 38%
• Per-cup cost
  : Decreased from RMB 1.8 to RMB 1.05, a drop of 42%

This scale effect stems from the diminishing marginal cost characteristic of the supply chain: the larger the procurement volume, the lower the unit procurement cost; the larger the production scale, the lower the unit production cost; the denser the distribution network, the lower the unit logistics cost[1][2].

Brand	Gross Profit Margin	Net Profit Margin	Number of Stores	Average Per-Cup Price
Mixue Ice City	32.5%	18.7%	46,000+	RMB 6
Heytea	45%	Approximately 12%	3,000+	RMB 15-20
Nayuki’s Tea	38%	Approximately 5%	1,500+	RMB 20-25
Industry Average	35-40%	8-10%	-	RMB 10-15

: Although Mixue Ice City’s gross profit margin is lower than that of high-end brands, its net profit margin (18.7%) significantly leads competitors. This indicates that , realizing a unique “low-price, high-profit” business model[1][2].

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Mixue Ice City adopts a “brand direct supply” franchise model, with more than 60% of beverage ingredients directly supplied to franchisees by the company. This model creates sustainable competitive advantages for franchisees[2]:

Franchisee Indicator	Mixue Ice City	Industry Average
Franchisee Gross Profit Margin	55%	40-45%
Payback Period	8 months	18-24 months
Single-Store Investment Amount	Approximately RMB 300,000	RMB 500,000-1,000,000

The low investment threshold and fast capital payback period enable Mixue Ice City to rapidly achieve store expansion, forming a positive cycle of “scale expansion → supply chain cost reduction → franchisee profitability improvement → more franchisees joining”[1][2].

Mixue Ice City’s low-price strategy is supported by a solid cost foundation:

Product	Selling Price	Cost	Gross Profit Margin
Lemon Water	RMB 4	Approximately RMB 1	75%
Fresh Ice Cream	RMB 2	Approximately RMB 0.5	75%
Pearl Milk Tea	RMB 6	Approximately RMB 1.5	75%

Even when raw material prices fluctuate, Mixue Ice City can still maintain price stability. For example, lemon water was initially priced at RMB 3, and due to cost advantages brought by surging procurement volume, it instead has greater profit margins[1].

Against the backdrop of fierce competition in the tea beverage market, Mixue Ice City’s supply chain advantages have built strong market defense capabilities:

1. Cost Barrier
   : Raw material costs are 20%-50% lower than the industry average, which is difficult for new entrants to replicate
2. Network Effect
   : The distribution network formed by 46,000 stores has significant first-mover advantages
3. Brand Assets
   : The “Snow King IP” and the theme song “Mixue Ice City Sweet Sweet” have formed strong brand awareness

In 2024, the number of closed stores in the national tea beverage industry reached nearly 200,000, and even giants with more than 5,000 stores could not escape the fate of a sharp slowdown in growth. However, Mixue Ice City bucked the trend, with the number of stores continuing to grow, and the spectacular scene of “nearly 10,000 stores opening overnight” appeared in 2024[1].

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Indicator	Data
Current Price	HK$422.20
52-Week Range	HK$256.00 - HK$618.50
YTD Increase	+45.59%
20-Day Moving Average	HK$416.56
50-Day Moving Average	HK$411.85
RSI (14-day)	53.58 (Neutral Range)
Annualized Volatility	55.19%

: The stock price is currently above the 50-day moving average, and the RSI is in the neutral range, indicating a stable short-term trend[0].

Valuation Indicator	Value	Industry Comparison
P/E (TTM)	38.64x	Consumer industry average 25-35x
P/B	6.62x	Relatively high
EV/OCF	31.10x	-
ROE	20.39%	Excellent

: Although Mixue Ice City’s P/E is higher than the industry average, the premium is reasonable considering its outstanding ROE performance, solid market position, and sustained profit growth[0].

First Shanghai Securities has given Mixue Ice City a

, with approximately 27% upside potential compared to the current price, and has given a “Buy” rating for initial coverage. The main logics include[2]:

• Deeply integrated supply chain, leading store scale in the industry
• Compared with peer companies, it has a deeper moat
• Should be given a certain valuation premium

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• High-End Brands Sinking
  : Brands such as Heytea and Nayuki’s Tea have launched low-priced product lines, which may form competitive pressure on Mixue Ice City
• Regional Brand Challenges
  : Local tea beverage brands in various regions seize market share by virtue of regional advantages

As the tea beverage enterprise with the largest number of stores, any food safety issue in a single store may trigger a brand crisis

Although Mixue Ice City has strong procurement bargaining power, factors such as extreme weather may still lead to sharp fluctuations in raw material prices

As store density increases, single-store passenger flow may decline, and same-store sales growth needs to be monitored

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:

1. Cost Advantage Quantification
   : Raw material costs are 20%-50% lower than the industry average, with a per-cup cost of approximately RMB 1
2. Profitability Improvement
   : Net profit margin increased from 13.5% in 2020 to 18.7% in 2024, an increase of 5.2 percentage points
3. Significant Scale Effect
   : Store scale reaches 46,000, and cost advantage is positively correlated with scale
4. Solid Competitive Barrier
   : The cost advantage formed by deep supply chain integration is difficult for competitors to replicate

Dimension	Evaluation
Growth	★★★★★ (Continuous store expansion, great potential in overseas market)
Profit Quality	★★★★★ (Leading net profit margin in the industry, healthy cash flow)
Valuation Rationality	★★★★☆ (Reasonable premium, but need to pay attention to short-term pullback risk)
Risk-Return Ratio	★★★★☆ (Suggest layout on dips)

:

The “low-price, high-profit” business model built by Mixue Ice City through deep supply chain integration is unique and sustainable in the new tea beverage industry. It is recommended that investors accumulate positions on dips to share the company’s long-term growth dividends.

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[0] Jinling API Market Data - Mixue Ice City (2097.HK) Real-Time Quotes and Financial Data (January 2026)

[1] OFweek - “Pinduoduo of the Tea Beverage Industry: How Mixue Ice City Dominates the Tea Beverage Industry with Its Supply Chain?” (https://mp.ofweek.com/Internet/a856714232557)

[2] First Shanghai Securities - In-Depth Research Report on Mixue Group (2097.HK) (April 2025) (https://pdf.dfcfw.com/pdf/H3_AP202504101654155262_1.pdf)

[3] Sina Finance - “Deciphering Mixue Ice City’s Supply Chain: RMB 1 Cost Supports the World’s Largest Catering Business” (https://t.cj.sina.cn/articles/view/1210405231/4825516f001014zk8)