DgcityMixue Group, the Chinese bubble-tea company behind the world’s largest food and drink store network, paid a special dividend on November 6 even as its once-relentless expansion shows signs of cooling. The payout of 2.65 yuan per share was worth about one billion yuan in total.
The dividend lands in a difficult year for the company’s stock. Shares have fallen sharply in 2026 and remain below their initial public offering price, as investors reassess whether a model built on ultra-low prices and rapid franchise growth can keep expanding profitably.
Financial results for the first half showed profit down 14.7 percent to 2.32 billion yuan, even as revenue edged up 2.3 percent, because the cost of sales rose. Franchisees opened 5,455 stores in the period, down from 7,721 a year earlier, while 1,289 outlets closed. The total network still grew to nearly 64,000 shops.
The pullback has been visible overseas. Mixue’s store count outside mainland China fell to 4,378 from 4,733, with outlets trimmed in Indonesia and Vietnam even as the company entered Mexico, Kyrgyzstan and Brazil. In early October, it closed its first Hong Kong store, in the busy Mong Kok district, after about three years, a shutdown that drew wide attention.
Mixue’s rise was built on cheap lemon drinks, ice cream and a vertically integrated supply chain that supplies sugar, milk, tea, cups and equipment to franchisees. The model works best in dense markets with low rents and labor costs, conditions that have become harder to guarantee in Hong Kong and parts of Southeast Asia.
The company is far from retreating globally. Southeast Asia remains its largest overseas market, and it is exploring local sourcing of tropical fruits, including dragon fruit and passion fruit, for products in places such as Cambodia. New markets in Central Asia and Latin America offer room for expansion, though with less developed supply chains.
The dividend suggests management is willing to return cash to shareholders while adjusting the pace of store openings. For China’s new-style tea sector, the message is broader: the era of simply opening more shops is giving way to a harder contest over profitability, store quality and international discipline.
