Shares in Mixue extended their downward slide this week after the Chinese ice cream and bubble tea powerhouse reported a surprising contraction in first-half net profit, rattled by surging operational expenses.

Despite booking robust top-line revenue growth fueled by rapid store expansion, rising ingredient prices and fierce discounting wars in the beverage sector severely eroded the budget brand's core operating margins.

The disappointing earnings report prompted an immediate sell-off among jittery investors, who worry sustained cost pressures will continue to challenge the low-cost giant's profitability model.