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Investing.com - HSBC initiated coverage on Mixue Group (2097:HK) with a Hold rating and a price target of HK$544.10 on Wednesday.
The firm noted that Mixue has established itself as the world’s largest fast-food chain by store count, commanding a 22.7% value share in China’s freshly-made tea beverage industry. By 2024, the company’s global footprint expanded to 46,479 stores, with 41,584 locations in China and 4,895 overseas.
HSBC highlighted that while China’s tea beverage industry is experiencing significant growth, it remains highly fragmented with low barriers to entry. The firm identified two successful differentiation strategies in the sector: becoming a cost leader in the low-priced category or specializing in one product in the mid-priced segment.
According to HSBC, Mixue has emerged as "the winner in the first category" with menu items generally priced around RMB7 per cup. The company’s end-to-end supply chain enables franchisees to penetrate lower-tier cities effectively.
HSBC emphasized that Mixue’s extensive store network reinforces its cost leadership position, while its self-created IP character, Snow King, has strengthened the company’s marketing and brand presence in the competitive market.
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