Mixue Group (02097.HK) reported first-half 2026 revenue of RMB 15.22 billion, up 2.3% year over year, while profit attributable to owners of the parent fell 14.7% to RMB 2.32 billion. Gross margin narrowed to 30.4%, and net margin attributable to shareholders declined 3.0 percentage points to 15.1%. The company declared its first special dividend since listing, paying RMB 2.65 per share, or approximately RMB 1.01 billion, subject to shareholder approval. Mixue operated 63,987 stores across 17 countries at the end of June, up 20.7% year over year, but per-store merchandise sales revenue fell about 17%, highlighting the limits of its store-opening growth model. Food-delivery subsidy withdrawal, increasing store density and cannibalization, and higher product-upgrade costs pressured results. Mixue also expanded freshly ground coffee in its main brand while operating the Lucky Cup coffee chain, raising concerns about internal competition. Shares fell more than 12% intraday on Aug. 27 and another 7.11% on Aug. 28, for a two-day decline of 14.88%, as investors reassessed the company’s shift from a high-growth expansion story toward lower growth, strong cash flow and shareholder returns. Same-store sales, franchisee profitability and the recovery of per-store output are likely to remain central to Mixue’s valuation.