Shanghai Auntie made 500 million yuan by selling supplies to franchise stores, closing over a thousand stores and setting a new record in history.

Ask AI · Behind the record high number of store closures, what optimization strategies are being considered?

By | Bai Xue

Edited by | Liu Peng

On March 24, Hushang Ayi (02589.HK) in Shanghai released its performance report for the year ended 2025. The company achieved revenue of RMB 4.47B, a year-on-year increase of 36.0%; attributable net profit was RMB 501 million, a year-on-year increase of 52.4%; according to the report, Hushang Ayi’s basic earnings per share were RMB 4.81, and the final dividend was RMB 10 for every 10 shares.

Image source: Hushang Ayi’s 2025 performance report

Based on compiled publicly available information, Hushang Ayi currently has three major brands under it: Hushang Ayi, Tea Waterfall, and Hu Coffee. According to shareholder information, Hushang Ayi’s shareholders are mainly made up of four companies. After looking through the ownership structure, Hushang Ayi’s founder, executive director, and executive president Jun Weijun serves as the legal representative of three of those companies; together, these three companies hold 78.51% of Hushang Ayi’s shares. Among them, Jun Weijun’s wife, Zhou Rongrong, is the largest shareholder.

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Similar to brands such as Mixue Bingcheng, Hushang Ayi’s main source of revenue is selling ingredients to franchisees. In total, this segment generated RMB 3.62B in revenue in 2025, accounting for 81% of total revenue, up 37.4% year over year. Franchise services generated RMB 690 million in revenue in 2025, accounting for 15.5% of total revenue, up 28.5% year over year.

Image source: Hushang Ayi’s 2025 performance report

Overall, Hushang Ayi’s performance growth is related to the company’s large-scale store expansion last year. By the end of 2025, Hushang Ayi had 11,449 stores, up 24.8% year over year. Of these, franchise stores increased by 2,271, and direct-operated stores increased by 2.

According to Zhishi Consulting data, in China’s ready-to-drink tea beverage shop market in third-tier cities and below, measured by total transaction value, between 2023 and 2028 it is the sub-segment with the largest scale and the fastest expected growth rate; there is huge growth potential in the future. As stated in the financial report, by the end of 2025, the proportion of stores in third-tier cities and below reached 52.7%, up 2.3 percentage points year over year.

Image source: Hushang Ayi’s 2025 performance report

Image source: CICC West Securities research report

What is worth paying attention to is that while Hushang Ayi opened many new stores in 2025, the number of store closures also hit a record high. In 2025, the number of closures for Hushang Ayi’s franchise stores was 1,383.

Image source: Hushang Ayi’s 2025 performance report

The financial report explains that, in line with the store expansion strategy and following a principle of “some entering and some exiting,” Hushang Ayi proactively optimized its network layout. While expanding store scale, the number of closed franchise stores accordingly increased. On the one hand, this is because some franchisees cannot achieve ideal store profitability, or they cannot obtain replacement locations after the expiration of their store leases. On the other hand, to further enhance consumer experience and improve store operation quality, Hushang Ayi proactively optimized and adjusted its store layout and exited some franchise stores.

Image source: CICC West Securities research report

On the day the financial report was released, Hushang Ayi closed at 77.7 yuan, up by 2.75 yuan from the previous trading day, representing an increase of 3.67%. The total trading volume for the day was 38.4k lots, the turnover was 2.9561 million yuan, and the turnover rate was 0.065%.

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