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Research on new tea and coffee franchisees: Luckin’s leading position is stable, Chaji is under pressure, and Mixue Coffee is cautious in its expansion (J.P. Morgan)

2026-07-29·ima-daily5min-0729-07-80880add53

Street Signal | Research on new tea and coffee franchisees: Luckin’s leading position is stable, Chaji is under pressure, and Mixue Coffee is cautious in its expansion (J.P. Morgan)

JPMorgan Chase revealed the brand differentiation pattern based on expert conference calls covering 49 Luckin, 3 Chaji and 2 Mixue stores in Hebei and other provinces.

Luckin's leading position is stable, with ASP and gross profit margin recovering, but labor costs drag down net profit; Chaji's same-store decline has stabilized, and franchisees' unit economics are squeezed by seasonal factors and commissions; Mixue Coffee's expansion is in a defensive posture, and most of its "Lucky Cup" products are losing money.

The logic behind this is that competition among new tea and coffee brands has intensified, and the ebbing of third-party subsidies has put pressure on store execution. The market has certain expectations for this, but the risk of franchisees' return cycle extending to more than three years may be underestimated.

The implication of the potential transaction is that investors are advised to refer to the brand differentiation pattern, pay attention to the profitability resilience of leading companies, and remain cautious about second-tier brands with fragile franchisee ecosystems.

One-sentence conclusion: The new tea and coffee track has entered a period of stock competition. The top brands are always strong, but the profit pressure at the franchisee level is becoming a common risk in the industry. Positive/negative: Positive for Luckin Coffee (LKNCY.US); negative for Chaji and Mixue Bingcheng.

The current stock price has partially reflected the expectation of intensified competition, but Ruixing's cost pressure and the franchisee risks of Cha Ji and Mixue have not yet fully priced in. Catalysts:

1) The next quarter financial reports of Luckin, Chaji, Mixue and other companies, focusing on profit margins, same-store sales and the number of franchisees;

2) Industry subsidies and price war trends;

3) Store expansion and store closing data of other brands.

Full text

Research on new tea and coffee franchisees: Luckin’s leading position is stable, Chaji is under pressure, and Mixue Coffee is cautious in its expansion (J.P. Morgan)

JPMorgan Chase revealed the brand differentiation pattern based on expert conference calls covering 49 Luckin, 3 Chaji and 2 Mixue stores in Hebei and other provinces.

JPMorgan Chase revealed the brand differentiation pattern based on expert conference calls covering 49 Luckin, 3 Chaji and 2 Mixue stores in Hebei and other provinces. Luckin's leading position is stable, with ASP and gross profit margin recovering, but labor costs drag down net profit; Chaji's same-store decline has stabilized, and franchisees' unit economics are squeezed by seasonal factors and commissions; Mixue Coffee's expansion is in a defensive posture, and most of its "Lucky Cup" products are losing money. The logic behind this is that competition among new tea and coffee brands has intensified, and the ebbing of third-party subsidies has put pressure on store execution. The market has certain expectations for this, but the risk of franchisees' return cycle extending to more than three years may be underestimated. The implication of the potential transaction is that investors are advised to refer to the brand differentiation pattern, pay attention to the profitability resilience of leading companies, and remain cautious about second-tier brands with fragile franchisee ecosystems. One-sentence conclusion: The new tea and coffee track has entered a period of stock competition. The top brands are always strong, but the profit pressure at the franchisee level is becoming a common risk in the industry. Positive/negative: Positive for Luckin Coffee (LKNCY.US); negative for Chaji and Mixue Bingcheng. The current stock price has partially reflected the expectation of intensified competition, but Ruixing's cost pressure and the franchisee risks of Cha Ji and Mixue have not yet fully priced in. Catalysts: 1) The next quarter financial reports of Luckin, Chaji, Mixue and other companies, focusing on profit margins, same-store sales and the number of franchisees; 2) Industry subsidies and price war trends; 3) Store expansion and store closing data of other brands.

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