Performance faces short-term pressure, long-term value is promising: Xiangpiaopiao's transformation enters a critical period?

Produced by|China Visit Network

Reviewed by|Li Xiaoyan

Xiangpiaopiao, which once became widely popular across the country with the advertising slogan “so popular it could go around the globe a few times,” and wore the halo of “China’s No. 1 milk tea stock,” is now going through a profound transformation pain as the industry undergoes change and the market iterates. In 2025, the company’s revenue and profit showed a two-consecutive-decline trend. Coupled with phased tests such as expanding its ready-to-drink business, pursuing diversified layouts, and equity incentive plans, this long-established beverage company is standing at a critical turning point for breaking the mold and being reborn.

From the broader industry outlook, China’s beverage market has entered a deep adjustment period in the game of existing players. Consumer demand has shifted from large-scale expansion to quality upgrades. The channel ecosystem is accelerating from traditional offline channels to a faster blending of online and offline. Traditional bubble tea companies that focus on brewing are generally facing growth pressure. Xiangpiaopiao’s phased adjustments are both a snapshot of industry cycle fluctuations and a necessary path for the company to proactively seek change and optimize its structure. In the face of challenges, the company adheres to an operating tone of steady progress. Centered on a “dual-wheel driving” strategy, it continues to push forward in areas such as product upgrades, channel expansion, and organizational optimization, gradually building a resilience system to withstand cycle fluctuations.

In 2025, Xiangpiaopiao expects to achieve revenue of 2.927 billion yuan, a year-on-year decline of 10.95%; attributable net profit of 102 million yuan to 125 million yuan, a year-on-year drop of 50.59% to 59.68%; and non-recurring profit declines of 56.42% to 64.68%. Although this performance shows phased pressure, it is not simply an operational downturn, but the result of the company proactively optimizing product structure and adjusting channel inventory.

From the perspective of performance composition, the short-term adjustment of the traditional brewed business is the core trigger. Due to changes in the timing of the 2025 and 2026 Spring Festival, the company’s peak-season sales window in the first and fourth quarters of 2025 was somewhat shortened. Combined with shifts in industry consumer habits, the brewed business faced clear short-term pressure. At the same time, the company adheres to the principle of “driving sales, not just inventory,” proactively reducing channel inventory levels to ensure channel inventory remains healthy and well-managed, laying the foundation for sales during the following peak season. This “stability first” strategy may have a short-term impact on revenue and profit, but it effectively avoids the risk of inventory overhang and lays a solid groundwork for long-term healthy development.

Worth noting is that under pressure, the company’s ready-to-drink business achieved steady growth, becoming an important support. In the first half of 2025, the ready-to-drink segment’s revenue was 591 million yuan, accounting for 58.3%. This is the first time it surpassed the brewed business, becoming the core carrier of the company’s second growth curve. Core products such as Meco fruit tea continue to iterate, and channel coverage keeps expanding, validating the growth potential of the ready-to-drink business. Judging from quarterly trends, in Q4 2025, the year-on-year revenue decline narrowed more clearly than in the first three quarters, and signs of business recovery are gradually emerging.

Performance volatility has carried over to the financial side. Xiangpiaopiao’s operating cash flow and cash on hand showed phased changes, which is a normal phenomenon during a corporate transformation period. In the first three quarters of 2025, the company’s net cash flow from operating activities was -26.9575 million yuan, mainly due to pre-season stocking before peak periods and channel adjustments. However, the company has consistently adhered to a prudent financial strategy, using a “fiscal-year pricing lock” model to manage raw material costs, advancing lean production to optimize its cost structure, and providing funding support for business transformation.

In terms of diversified layout, Xiangpiaopiao is expanding the boundaries of its core business. Although it faced challenges in stages, the direction of exploration aligns with industry trends. Initiatives such as piloting offline milk tea shops, laying out the Thai ASEAN market, and jointly establishing a large consumer industry fund all reflect the company’s determination to break through growth bottlenecks. Among them, the Thailand plan focuses on premium cup-style fruit tea. With differentiated advantages such as tropical flavors, real fruit juice, and low sugar with zero fat, the target is to cover the ASEAN market, aligning with local young consumers’ demand for healthier beverages.

At the same time, the company continues to intensify product innovation, advancing a R&D strategy of “health-focused, youth-oriented, functional, and scenario-based.” In the brewed business, along the directions of “health-focused” and “youth-oriented,” it upgrades and launches wellness functional products such as “Gu Fang Wu Hong” warm milk tea, in cooperation with Zhejiang Chinese Medical University; the pilot sales feedback has been good. In the ready-to-drink business, Meco fruit tea continues to iterate its flavors. It rolls out customized products for channels such as snack bulk retailers and the catering market. In cooperation with top snack bulk retailers, the number of partnered stores exceeds 30,000, and channel coverage continues to deepen. While these measures increase investment in the short term, they lay the foundation for the company to build a growth matrix across multiple categories and multiple channels.

On the capital markets front, as performance adjusts, Xiangpiaopiao’s share price shows phased volatility. Its market value has shrunk compared with its peak period, but this is a rational reflection by the market on industry cycles and the company’s transformation. To bind the core team and support the company’s long-term development, the company continues to optimize its equity incentive mechanisms. In 2026, it will roll out a new employee stock ownership plan and a restricted stock incentive plan, covering core management and technical personnel, and set net profit targets for 2026–2027, injecting momentum into its transformation and development.

In response to the phased unrealized loss that appeared during the exercise period of the 2023 equity incentive plan, the company actively addressed it by optimizing performance evaluation targets and promoting business recovery. In 2025, the company completed the cancellation of certain options that did not meet the performance targets, ensuring that the incentive mechanisms remain fair and effective and do not affect the share capital structure and financial position. Meanwhile, the company strengthened organizational building. Founder Jiang Jianqi returned to core management and, adhering to the philosophy of “the wisdom of endurance,” hands over to the younger team to take charge of traffic operations, driving organizational youthfulness and high efficiency. On the marketing front, combining with young consumers’ preferences, it carries out activities such as cross-border co-branding and pop-up events, strengthening the emotional connection between the brand and consumers.

In 2026, as a key year for Xiangpiaopiao to push through its transformation campaign, the company will continue to deepen the “dual-wheel driving” strategy. It will promote a healthy upgrade of the brewed business and build the second growth curve for the ready-to-drink business, achieving dual-wheel coordination and balanced development. On the product side, the brewed business will focus on health-oriented innovation, expand wellness functional products and premium gift-box packs, and fill the blank in the 20–50 yuan price-band gift market; the ready-to-drink business will enrich its product matrix, improve plant and production capacity utilization, make a key breakthrough in the catering channel, and cultivate a new growth engine.

On the channel side, while consolidating traditional channels, it will continue to expand emerging channels such as snack bulk retailers and catering, roll out customized products, and improve channel coverage efficiency and sales-driving ability. In terms of expense deployment, it will adhere to the principle of “prudent/steady,” tilt funding toward new products that have shown positive feedback, improve cost-effectiveness and brand visibility, and avoid blind expansion. At the same time, the company will closely monitor industry trends, dynamically adjust resource allocation, adapt to the off-peak and peak season rhythms of the brewed and ready-to-drink businesses, and improve operating efficiency.

From the perspective of the industry landscape, China’s beverage market still has broad room for growth. Health-focused, scenario-based, and quality-driven trends have become core directions. With years of brand accumulation, channel foundations, and R&D capabilities, Xiangpiaopiao is gradually getting out of its transformation pain. As the ready-to-drink business continues to expand in scale, product innovation keeps landing, and channel efficiency keeps improving, the company is expected to capture more share in the stock/limited market and achieve a transformation from “leading in scale” to “leading in value.”

There is never an easy road to transformation. Xiangpiaopiao’s phased challenges are an inevitable test during the period of industry change, and also a necessary stage for companies to break through obstacles and be reborn. Centered on dual-wheel driving, powered by product innovation, and safeguarded by organizational optimization, this once nationwide craze “No. 1 milk tea stock” is building up momentum with steadfast resilience, writing a new chapter of breakthrough growth amid industry adjustments.

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