China’s number one bubble tea brand, Meixue, has recently reached an incredible milestone: 46,479 stores globally, making it the largest fast food and drink chain by store count in the world. That’s more stores than McDonald’s, Starbucks, and Luckin Coffee combined.

If you look closely at the growth chart, Meixue’s rise has been meteoric, overtaking established fast-food giants in record time. But what’s behind this success, and what can investors learn from it? Let’s dive into the numbers and the business strategy that propelled Meixue to the top.

Meixue was founded by Zhang Hong Chao, one of China’s young entrepreneurial talents. At first glance, Meixue may appear to be a B2C business that earns money primarily by selling drinks to customers.

In reality, their revenue model is predominantly B2B, meaning they generate most of their income by selling supplies, packaging, and raw materials to their franchisees rather than directly selling beverages. In fact, 94.3% of their revenue comes from supplying franchisees, while only 2.4% comes from franchising fees.

This approach allows Meixue to scale rapidly, maintain consistency across thousands of stores, and achieve strong financial performance, all while offering affordable products like bubble tea and ice cream.

When evaluating Meixue as a potential investment, several financial metrics stand out:

1. Revenue Growth: From 2021 to 2024, Meixue’s revenue has shown a consistent uptrend, meeting one of the primary criteria for a fast-growth company.
2. Profitability: While there was a slight dip in profits at one point, the overall profit trend remains upward, reflecting sound operational efficiency.
3. Cash Flow: Positive cash flow is critical to any investment. Meixue’s cash flow has also trended upward, supporting further expansion and sustainability.
4. Balance Sheet Strength: One important measure is the debt-to-equity ratio, which indicates how leveraged a company is. For Meixue, the ratio is only 0.01, well below our threshold of 0.5. This suggests the company is using debt conservatively and has strong financial stability.
5. Share Performance: Meixue went public on the Hong Kong Stock Exchange in March 2025 at an IPO price of HK$202.5. By August 27, 2025, the share price had jumped to HK$460.4, an increase of 56.02%.
6. Valuation: While Meixue’s price-to-earnings (P/E) ratio is 38, comparable to Starbucks and higher than Luckin Coffee, valuation alone doesn’t tell the full story. Investors must compare P/E ratios within the same industry and consider the company’s growth trajectory.

Meixue’s story isn’t just about bubble tea—it’s about strategic business planning, financial discipline, and scalable growth models. For investors, it demonstrates the importance of:

• Understanding a company's business model before investing
• Evaluating multiple financial metrics: revenue, profits, cash flow, and debt
• Considering long-term growth potential over short-term price movements
• Using relative valuation metrics, like P/E ratios, to make informed comparisons.