Mixue Group, the leading bubble tea and beverage chain from China, is making waves with its forthcoming initial public offering (IPO) on the Hong Kong Stock Exchange. The company plans to raise approximately HKD 3.45 billion (USD 443.66 million) as it opens books for its stock sale today, February 21, 2023. Mixue is set to offer 17.1 million shares at HKD 202.5 each, with trading expected to commence on March 3, 2023.
This IPO will value Mixue at around USD 9.8 billion, attracting the interest of five prominent investors who have collectively committed USD 200 million. Reportedly, Mixue previously sought to raise as much as USD 1 billion but decided to lower the amount due to the absence of pressing financial requirements.
Founded by Zhang Hongchao in 2001, Mixue initially emerged from homemade ice shavings and has since grown to dominate the fast-food beverage market across China and beyond. With 45,000 outlets throughout the world—including 11 countries—its design-heavy Snow King mascot has become synonymous with youthful energy. The brand prides itself on offering drinks, ice cream, and coffee at just about USD 1.
A significant aspect of Mixue's business model is its franchise system, with over 99% of its stores operating as franchises. Despite this, the company reports only 2.4% of its income derived from franchise fees during the first nine months of 2023, as the bulk of revenue is generated from the sale of ingredients and equipment to its franchisees.
Independent food and beverage analyst Zhu Tunpeng points out, "Despite being the fastest-growing fast-food chain globally, much room remains for Mixue to expand, particularly within the counties, townships, and villages, where over 200,000 non-standard small outlets exist. Mixue has the potential to replace these with its own standard shops." This projection underlines the company's strategy to capture underserved markets.
The IPO is considered significant, not only for Mixue Group but the broader beverage sector, as it showcases the resilience and adaptability of Asian food chains post-pandemic. Investors are eagerly watching how this venture will play out for Mixue's positioning within the competitive food and beverage industry.
With the launch of this IPO, stakeholders are preparing for what Mixue has coined as its next phase of growth. The upcoming listing, engaging branding, and solid expansion strategy paint a promising future for this bubble tea behemoth, marking yet another chapter of rapid growth fueled by aggressive market penetration and product innovation.