Downgrade and Valuation Changes: Daiwa downgraded MIXUE GROUP from Outperform to Hold, reducing its target price from $535 to $427 and lowering the projected 2026 PE ratio from 28x to 22x due to concerns over future earnings growth and the validation of its overseas market expansion.

Sales Growth and Market Expectations: Despite a resilient same-store sales growth post-subsidy wave, Daiwa believes the market may have overly high expectations for MIXUE GROUP's second growth engine, which is yet to be proven.

Market Positioning and Innovation Limitations: Daiwa noted that MIXUE GROUP's mass market positioning restricts its product innovation and pricing flexibility compared to mid-tier competitors like GUMING and Luckin Coffee.

Business Model Comparison: The report likened MIXUE GROUP's business model and long-term advantages to TINGYI, highlighting its strong franchisee network and supply chain benefits, particularly in lower-tier cities.

Billionaire Growth in China: By 2025, mainland China is expected to have 70 new billionaires, increasing the total to 470, with a combined wealth of USD1.8 trillion, second only to the US.

Wealth Increase Among Self-Made Billionaires: In 2023, the wealth of 196 self-made billionaires globally rose by USD386.5 billion, highlighting significant financial growth among entrepreneurs.

Self-Made Billionaires in China: UBS reports that approximately 98% of billionaires in mainland China are self-made entrepreneurs, emphasizing the entrepreneurial spirit in the region.

Market Insights: UBS's Lu Zijie noted expectations of a decline in same-store sales for MIXUE GROUP, despite positive stock recommendations from G Sachs.

Market Performance: The HSI rose by 111 points (0.4%) to close at 25,801, while the HSCEI and HSTECH also saw gains, with trading activity slowing ahead of a long holiday, resulting in a turnover of $169.777 billion.

Resource and Aluminum Stocks: Resource stocks like Jiangxi Copper and Zijin Mining experienced significant increases, while aluminum stocks also saw modest gains, reflecting a positive trend in these sectors.

Consumer Stocks Surge: New consumer stocks such as Mixue Group and Laopu Gold reported substantial increases, with Mixue Group expanding internationally by opening a store in Hollywood, Los Angeles.

Hainan-Concept Stocks Activity: CTG Duty-Free saw a remarkable rise of 15.77%, indicating strong interest in Hainan-concept stocks, with significant turnover reported.

Stock Performance: MIXUE GROUP's stock rose by 9.4% to close at $432.2, with intraday highs reaching $433.8 and a turnover of $328 million.

New Store Opening: The company opened a new store in Hollywood, Los Angeles, on December 20, located near the TCL Chinese Theatre in a popular shopping area.

Consumer-Friendly Pricing: The new store offers affordable menu items, including ice cream for $1.19, iced lemonade for $1.99, and lattes for $2.99.

Market Outlook: Analysts from G Sachs have reiterated a "Buy" rating on MIXUE GROUP, although they expect same-store sales to decline next year.

Market Performance: The HSI closed at 25,742, up 51 points (0.2%), with the HSCEI and HSTECH also showing gains, while trading volume decreased ahead of a long holiday.

Tech Stocks: Major tech stocks had mixed results; KUAISHOU, BIDU, and BABA saw slight increases, while TENCENT, MEITUAN, and XIAOMI experienced minor declines.

Chip Stocks Surge: Chip stocks performed well, with SMIC rising 6.6% and HUA HONG SEMI increasing 4.9%, indicating strong investor interest in the sector.

Resource and Consumer Stocks: Resource stocks gained due to high international gold prices, while new consumer stocks like LAOPU GOLD and MIXUE GROUP saw significant increases in their share prices.