"Milk Tea First Stock" Nayuki Faces Predicament: Two Consecutive Years of Performance Decline, Diversification Stumbles, Employee Stock Options "Lock in" Executives

(Source: No.9 Observation)

Author | Tiaotiao

Once swept across the country with the slogan “can circle the Earth several times,” Xiangpiaopiao, branded as “China’s No.1 Milk Tea Stock,” fell into unprecedented operational difficulties in 2025.

According to Xiangpiaopiao’s recent performance forecast for 2025, revealing the company’s awkward situation: revenue down over 10% year-on-year, profits halved, and performance further deteriorated.

Coupled with consecutive declines in revenue and profit, cash flow pressures, obstacles in diversification efforts, and a declining stock price leading to losses for employee stock holdings, Xiangpiaopiao’s “Milk Tea Empire” is facing an unprecedented test.

1

Performance declines for two consecutive years with accelerating drops,

Profit hits nearly 13-year low

Xiangpiaopiao’s 2025 performance forecast is among its worst since listing. The announcement shows the company expects a net profit attributable to parent company of 102 million to 125 million yuan, down 50.59% to 59.68% year-on-year; non-recurring profit and loss included, net profit is projected at 77 million to 95 million yuan, with a larger decline of 56.42% to 64.68%. Revenue is estimated at about 2.927 billion yuan, a 10.95% decrease year-on-year.

This is not the start of Xiangpiaopiao’s performance decline but its second consecutive year of sluggishness. Looking back at the 2024 annual report, Xiangpiaopiao achieved revenue of 3.287 billion yuan, down 9.32% year-on-year; net profit attributable to parent was 253 million yuan, remaining profitable but foreshadowing future declines. From a 9.32% revenue drop in 2024 to an estimated 10.95% in 2025, and from stable net profit in 2024 to a halving in 2025, the decline is accelerating, and operational conditions are worsening.

More worryingly, the profit for the entire year of 2025 largely depends on non-recurring gains and seasonal peak performance in the fourth quarter. Reviewing the financial data for the first three quarters of 2025, Xiangpiaopiao’s profitability is even worse: revenue of 1.684 billion yuan, down 13.12% year-on-year; net loss of 89.2072 million yuan, a sharp drop of 603.07%, with accumulated losses approaching 89.21 million yuan by the end of September 2025. Breaking down quarterly: Q1 net loss of 18.775 million yuan, Q2 loss of 97.3909 million yuan, Q3 achieved a profit of 8.1837 million yuan but still down 82.67% year-on-year, unable to reverse the overall loss trend.

The continuous decline in performance has pushed Xiangpiaopiao’s revenue back to pre-2018 levels, with net profit hitting a nearly 13-year low. Data shows that Xiangpiaopiao peaked in 2019 with revenue of 3.978 billion yuan and net profit of 347 million yuan. By 2025, revenue is expected to be less than 3 billion yuan, and net profit under 125 million yuan, shrinking over 60% from its peak. The former “milk tea leader” has long lost its former glory.

2

Financial pressure intensifies: net cash outflow,

Cash on hand continues to shrink

The ongoing poor performance directly affects the company’s finances, leading to worsening cash flow and shrinking cash reserves, increasing operational pressure.

Continuous net outflow of operating cash flow signals worsening financial health. According to financial reports, in the first three quarters of 2025, Xiangpiaopiao’s net cash flow from operating activities was -26.9575 million yuan, in a state of net outflow; Q1 outflow was 77.7336 million yuan, Q2 outflow was 258 million yuan. Although Q3 improved somewhat, the overall net outflow persisted.

Compared to the same period in 2024, where net cash flow from operating activities was 31.6963 million yuan, turning positive from negative, the decline is significant. In 2024, despite a total of 2.65 billion yuan in operating cash flow, it was a sharp drop from 3.83 billion yuan in 2023, indicating declining profitability and cash recovery ability.

The shrinking cash reserves further increase financial stress. From the asset-liability statement: at the end of 2024, current assets totaled 2.995 billion yuan; by the end of September 2025, they decreased to 2.835 billion yuan, a reduction of 160 million yuan in nine months. Total assets fell from 4.873 billion yuan at year-end 2024 to 4.723 billion yuan at the end of September 2025. Cash and cash equivalents dropped from 2.485 billion yuan at the end of 2024 to 2.1 billion yuan in September 2025. The tight cash flow affects daily operations, R&D investment, and hampers diversification and market expansion efforts.

3

Diversification efforts hindered,

New businesses struggle to drive growth

Years ago, Xiangpiaopiao recognized the risks of relying solely on instant milk tea—seasonality of brewed products, with off-peak in summer and peak around Chinese New Year, plus the rise of fresh brewed tea drinks squeezing market share. To counter this, Xiangpiaopiao launched diversification strategies early on, but these efforts have largely failed to meet expectations, with obstacles along the way.

The core diversification move is the ready-to-drink (RTD) segment. In 2017, Xiangpiaopiao launched Meco fruit juice tea, entering the RTD market. With differentiated products and cup packaging, it initially gained some market traction. But the good times didn’t last. From 2020 to 2023, revenue from RTD dropped sharply to 600 million yuan, exposing internal operational issues and external market pressures.

According to Xiangpiaopiao’s “2025 Q3 Operating Data Announcement” released on October 30, 2025, in the first three quarters, RTD sales reached 833 million yuan, a 3.92% increase year-on-year, and for the first time, RTD revenue surpassed brewed tea. However, the slow growth rate makes it difficult to offset the decline in brewed tea sales.

Data shows brewed tea revenue in the first three quarters of 2025 was 822 million yuan, down 25.96% year-on-year, a much larger drop than RTD’s growth. Meanwhile, competition in the RTD sector is intensifying, with giants like Nongfu Spring and Master Kong leveraging supply chain and channel advantages to lower prices, while new brands like Genki Forest innovate in niche segments. The gross margin of Xiangpiaopiao’s RTD business remains far below brewed tea, limiting profitability and making it hard to become a core profit driver.

Additionally, Xiangpiaopiao has invested heavily in marketing to promote RTD. In the first half of 2025, sales expenses reached 331 million yuan, with a sales expense ratio of 32%, and still 30% at the end of September. This “spend to gain” model is unsustainable and has not resulted in substantial performance growth.

In 2025, Xiangpiaopiao further expanded diversification: opening two offline milk tea shops in Hangzhou to re-enter the fresh brewed tea market. But the market is already saturated with brands like Mixue Bingcheng and Gu Ming, and Xiangpiaopiao lacks experience and a professional team in this segment. High labor and rent costs further burden the company.

It also plans to invest about 268 million yuan in Thailand to acquire land and build a factory, aiming to introduce its RTD products into Thailand and other ASEAN markets. But Southeast Asian beverage markets are highly competitive, requiring long-term investment and market cultivation, making short-term results unlikely and possibly worsening financial pressures.

Furthermore, Xiangpiaopiao has tried to diversify by setting up funds. In July 2025, it announced a 100 million yuan investment in a 1-billion-yuan fund focused on consumer industries. However, this move diverts funds from core operations, and with financial and cash flow pressures, it offers little support to the company’s main business.

4

Low stock price, shrinking market value,

Shareholder incentives become “loss traps”

The continuous decline in performance and failed diversification are reflected in the capital markets. Xiangpiaopiao’s stock price remains low, with a significant drop in market value, eroding investor confidence and causing losses for executives and employees participating in stock incentive plans.

Looking at Xiangpiaopiao’s market performance, its market cap once exceeded 15 billion yuan in 2019, making it a “star” in the capital market. But since then, as performance declined, its market cap shrank to around 4 billion yuan. In 2025, the stock price remained depressed. As of December 31, 2025, the closing price was 13.43 yuan, down 18.11% for the year, from 16.40 yuan at the end of 2024, a drop of 2.97 yuan. As of March 19, 2026, the company’s market cap was only 5.36 billion yuan, nearly 10 billion yuan less than its peak, a decline of over 60%.

The persistent low stock price has turned employee stock incentives into “loss traps.” In April 2023, Xiangpiaopiao issued a stock option incentive plan with an exercise price of 14.74 yuan per share.

According to the announcement, some options were exercised in Q4 2024 and Q1 2025, but as of December 31, 2025, the stock price was 13.43 yuan, below the exercise price. Currently, the stock price is around 13 yuan, still below the exercise price, meaning executives and employees who bought shares through the incentive plan are at a loss.

Data from Eastmoney shows that Zou Yongjian, the company’s secretary and CFO, exercised 180,000 shares at 14.23 yuan per share in June 2025, incurring a loss of over 22,000 yuan at current prices. Employee director Ding Xuebao exercised 5,000 shares last February, losing over 6,000 yuan. Vice President Yang Jing exercised 31,500 shares last February, with a current loss of about 38,000 yuan.

From a “company that could circle the Earth” to a situation of two consecutive performance declines, financial pressures, failed diversification, low stock prices, and widespread employee losses, Xiangpiaopiao’s predicament reflects the broader challenges faced by traditional brewed milk tea companies amid consumption upgrades and intensified market competition.

Despite attempts to escape these difficulties through fresh brewed tea expansion, overseas development, and stock incentives, none have yielded substantial results so far. The bleak performance in 2025 and how to revitalize core competitiveness, find sustainable growth, and ease financial pressures remain urgent issues for Xiangpiaopiao.