Mixue Group reported a 33% surge in net profit to 2.2 billion yuan for 2025, exceeding analyst expectations despite a brutal price war in China's bubble-tea market. Revenue climbed 35% to 33.56 billion yuan ($4.87 billion), outpacing the 32.94 billion yuan average estimate. The Hong Kong-listed company, which operates 55,356 outlets, weathered intense competition from food delivery platforms and rivals offering ultra-cheap teas as low as 2 yuan. UBS downgraded Mixue to neutral in January, citing concerns about narrowing margins and rising raw material costs, while analysts predict 2026 profitability will decline further due to subsidy-driven promotions inflating consumer price sensitivity. China's antitrust watchdog is investigating delivery platform subsidy practices, though Mixue's global expansion continues with new stores in Los Angeles and New York.

The broader sector remains troubled, with premium chains like Haidilao and Luckin Coffee reporting weak same-store sales amid a consumer pullback.