Mixue Ice City’s 60k stores earn 270 yuan per store daily, does Zhang Hongfu hand this problem over to the CFO?

On March 24th, Mixue Bingcheng released its 2025 financial report and also announced a leadership change. The 42-year-old founder, Zhang Hongfu, stepped down as CEO and shifted to oversee “long-term strategy,” with 35-year-old former CFO Zhang Yuan, who has a strong investment banking background, officially taking over.

Zhang Yuan immediately took proactive measures upon taking office, clearly stating the plan to slow down domestic store expansion and focus on supply chain upgrades, investing 1.6 billion yuan to fully replace raw materials with fresh milk and fresh fruit. This move indicates that Mixue Bingcheng will sacrifice short-term profits and growth to address its “cheap” label and develop more steadily.

Zhang Hongfu’s resignation surprised the market, as he was still in his early 40s, a prime age for vigorous activity. His decision to “retreat in a hurry” at this time may reflect a lack of confidence in Mixue Bingcheng’s quality, prompting the company to bring in a younger Zhang Yuan to correct course.

Following the release of the financial report and leadership change, the company’s stock price experienced four consecutive declines, with a total drop of 19.4% over the four trading days after the earnings conference. By March 30th, the stock had fallen by 30.5% since the report. Based on this, Mixue Bingcheng’s market value evaporated by 47.4 billion Hong Kong dollars. Compared to the peak stock price of 618.5 HKD in June 2025, the share price has halved, with a market cap loss of about 110 billion HKD.

Compared to the cold reception from capital markets, the more concerning issue for Mixue Bingcheng is its store profitability. After all, the average profit margin per store is not strong, which impacts the company’s expansion and future development.

Is the daily profit per store only 270 yuan?

The financial report shows that in 2025, Mixue Bingcheng’s revenue was 33.56 billion yuan, up 35.2%; net profit attributable to the parent was 5.88 billion yuan, up 32.7%. Overall, the core operating indicators exceeded market expectations. However, when calculated on an average store basis, its profitability raises doubts among many investors.

By the end of 2025, Mixue Bingcheng had a total of 59,823 stores worldwide. In terms of store scale, it has surpassed McDonald’s and Starbucks, ranking first globally in freshly made beverage stores. But in 2025, Mixue Bingcheng closed 2,527 franchise stores, a significant increase of 57.1% from 1,609 in 2024. Its overseas market shrank for the first time, with a net reduction of 428 stores, an 8.7% decrease.

The net profit of 5.88 billion yuan appears impressive, but when divided among all stores, it shocks many investors. The average net profit per store in 2025 was about 98,290 yuan, with a daily net profit of only 269.3 yuan—less than 270 yuan. A system with 60k stores earning nearly 6 billion yuan annually, but with such thin margins per store.

Seeing that each store earns less than 270 yuan daily, many will be surprised. Industry comparisons show that Mixue Bingcheng’s profit margins are similarly thin. McDonald’s China stores average a daily net profit of 2,740 yuan, KFC about 1,920 yuan, Starbucks around 1,300 yuan, and Luckin Coffee, another tea brand, about 870 yuan daily. The comparison reveals that Mixue Bingcheng’s average profit per store is among the lowest in the industry.

Low store profitability means the threshold for franchisees isn’t high. With an average annual net profit of less than 100k yuan per store, in first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen, it’s hard to attract franchisees. Even with low entry barriers, franchisees are more likely to enter, and stores can expand more easily, but only through volume—relying on massive user scale to lower the net profit per cup. This is how nearly 60k stores can accumulate 5.88 billion yuan in net profit.

The large number of stores gives Mixue Bingcheng a powerful supply chain, with self-built production bases in Henan, Hainan, and other regions, along with warehousing and distribution systems. From cups to milk powder, core materials are mainly produced and supplied directly by headquarters. Costs are kept low, and the system operates more stably.

Is leadership change a necessity for refined operations?

The leadership change at Mixue Bingcheng was completely unexpected. Zhang Hongfu, born in 1984, was not yet of retirement age. In his resignation statement, he said he would focus on AI, embodied intelligence, green agriculture, and cultural IP development. Many netizens believe he has already achieved his goals and is stepping back.

Public information shows Zhang Hongfu studied law at Huanghe Science and Technology College (now Huanghe Science and Technology University), but dropped out in 2004. He later pursued further education, earning an MBA and DBA in business management at Cheung Kong Graduate School of Business.

His successor, Zhang Yuan, is from a prestigious university—holding a master’s degree in finance from Tsinghua University. He previously worked at top financial institutions like Bank of America Securities and Hillhouse Capital. Unlike many imagine him as a long-time veteran of Mixue Bingcheng, Zhang Yuan only joined the company two years ago. After a setback in the company’s A-share IPO in September 2022, he was recruited in February 2023 to help enter the capital markets. He submitted a Hong Kong IPO prospectus in January 2024, and after a second filing in January 2025, pushed forward rapidly. On March 3, 2025, he successfully listed on the Hong Kong Stock Exchange, becoming a benchmark in the new tea beverage industry.

Zhang Yuan led the entire IPO process, responsible for drafting the prospectus, financial compliance, investor communication, pricing, and issuance. The public subscription reached 1.82 trillion HKD, surpassing Kuaishou and becoming the “frozen capital king” on the Hong Kong stock market. The first-day share price surged 43.21%, with a market value close to 110 billion HKD, breaking the “listing at a loss” curse.

From joining Mixue Bingcheng in 2023 to becoming the head two years later, Zhang Yuan’s strong capability is evident. This contrasts sharply with the founder’s grassroots background. It reflects a current trend in the corporate world: as industries shift from rapid expansion to refined management, CEOs with financial backgrounds are becoming increasingly favored.

Why does Mixue Bingcheng attach such importance to a financial background like Zhang Yuan’s? A glimpse can be seen from its financial structure. The company relies heavily on a franchise model based on “selling raw materials + collecting franchise fees.” In 2025, 97.6% of total revenue came from product and equipment sales, while franchise and related service income accounted for only 2.4%. The headquarters almost bears no operating costs for physical stores but maintains core profits through upstream supply chains. This means franchisees bear all operational risks, leading to a situation of “high investment, low returns, and high risk.”

Currently, franchisees pay over 300k yuan upfront for franchise fees, equipment, and renovations. Coupled with raw material procurement, rent, and labor costs, a single store needs daily revenue of over 3,000 yuan to break even.

Due to global supply chain shortages and rising oil prices, costs for core raw materials are expected to increase significantly. Market feedback indicates that Mixue Bingcheng has not passed these cost pressures onto consumers, further squeezing franchise store margins.

Are most profits going to landlords?

Many consumers may have noticed that Mixue Bingcheng outlets are almost everywhere—near schools, in urban villages, at shopping districts, and night markets. This is part of its site selection logic. Mixue Bingcheng pursues a low-margin, high-volume strategy, relying on volume to profit rather than high per-cup margins. Students, night market snackers, urban village workers—all are typical customers for a quick, affordable drink. Busy, crowded locations naturally attract plenty of buyers.

“Only competing for the traffic C-position, not wasting effort on fancy tricks,” the goal is to lock in prime locations with the highest foot traffic. But this approach risks significantly increasing rent costs. In first-tier cities, rent accounts for over 20% of total costs; in lower-tier markets and third- or fourth-tier cities, rent costs are about 10-12%.

Mixue Bingcheng opened the market with low prices, but what about profit margins? Industry reports show that the direct cost of a 2-yuan ice cream cone mainly includes ice cream mix, cone shells, and packaging, with raw materials and packaging costs around 0.5–0.6 yuan, resulting in a gross margin of about 70–75%. The long-standing top seller, a 4-yuan fresh lemon water, has direct costs including tea, fructose, lemon raw materials, cups, straws, and sealing materials, with total costs around 1.3–1.6 yuan, and gross margins roughly 65–70% (not including store rent and other expenses).

Typical gross profit margins for food and beverage categories are: tea drinks/desserts usually 65–75%, such as milk tea, juice, cakes, benefiting from low raw material costs and high pricing; fast food/simple meals generally 55–65%, like burgers, fried chicken, pizza, relying on standardized production and quick turnover. Industry data shows that Mixue Bingcheng’s ice cream gross margin is slightly higher, while its 4-yuan lemon water gross margin is at industry average.

Financial reports confirm this: in 2025, gross margin was only 31.14%, down 1.32 percentage points from 32.46% in 2024. Among listed tea beverage companies, Mixue Bingcheng’s gross margin is relatively low. For example, Nayuki, the first listed tea brand, had a gross margin of 66.05% in 2025 despite a net loss of 239.1 million yuan. Chabaidao’s gross margin was 32.51%, Guming 32%, Shanghainese Auntie 33%, and Bawang Tea Princess 51.5%. Among known listed tea brands, Mixue Bingcheng’s gross margin ranks at the bottom, likely related to its strategy of opening stores in prime locations, which increases rent costs. Yet, its net profit margin is 17.66%, second only to Guming and Bawang Tea Princess.

From Zhang Hongfu to Zhang Yuan, from rapid expansion to refined management, the leadership change at Mixue Bingcheng reflects a shift from “grassroots entrepreneurship” to “elite governance.” Behind this is the pressure of store-level profitability, driving more precise operations, and industry reshuffling from “scale is king” to “profit is king.”

When 60k stores generate less than 270 yuan in daily net profit, and franchisees struggle with “high input, low return,” Mixue Bingcheng must confront the hidden risks behind the “low-price myth”—that scale-driven profits ultimately cannot replace the profitability of individual stores. Zhang Yuan’s investment banking background and financial genes are key to breaking this deadlock: he needs to use capital market logic to rebuild supply chain efficiency, optimize franchise models, and turn “thin margins” into sustainable profits.

This leadership change is not just a corporate self-revolution but also a microcosm of China’s new tea beverage industry transitioning from “barbaric growth” to “rational maturity.” When traffic dividends peak and consumers return to rationality, only by truly solving the profitability of individual stores—making franchisees profitable and consumers feeling they get value—can the industry survive cycles and become a “century-old brand.” The next step for Mixue Bingcheng is not to open more stores but to ensure each store is “profitable”—this is the challenge Zhang Yuan must deliver after taking over.

This article is an original BT Finance piece. Unauthorized use, copying, dissemination, or adaptation is prohibited. Legal action will be taken against infringement.

Author | Meng Xiao

Author statement: Content quoted from external media.