Mixue Ice Cream, officially known as Mixue Group, made its much-anticipated debut on the Hong Kong Stock Exchange on March 3, 2025, with shares listed at HK$202.50 each. The opening day was impressive, seeing the stock price soar by over 36% to around HK$277, which pushed the company’s market capitalization past HK$1,044 billion.
The initial public offering (IPO) was met with unprecedented enthusiasm from investors. According to the company’s announcements, the public offering saw subscriptions of HK$1.84 trillion, indicating interest levels reaching 5,258 times the shares offered. The international offering matched this high demand, with subscriptions reaching 35.23 times the shares available.
Significant participation came from prominent cornerstone investors, including M&G Investments, Sequoia China, and Hillhouse Capital, among others. These institutions amassed subscriptions totaling approximately US$200 million, equivalent to about HK$1.56 billion. This level of institutional backing underscored Mixue’s strong market positioning as it steps onto the public stage.
Interestingly, the success of Mixue contrasts starkly with its peers. Recently listed tea brands like Naixue Tea and Cha Bai Dao faced disappointing stock performances, often seeing their shares drop below their IPO prices on debut. Conversely, Mixue’s initial strong performance not only defied this trend but also suggested investor optimism about its growth potential.
The brand, which now boasts over 46,000 outlets globally, has established itself as the leading player within the fresh beverage market, achieving notable sales numbers, including 90 million cups sold and retail sales approaching RMB 58.3 billion (USD 8.5 billion) by 2024. This rapid expansion has positioned Mixue as the global champion of ready-to-drink products.
This IPO, which marked one of the largest subscription levels on the Hong Kong Exchange, reflects not only market confidence but highlights how Mixue's popularity has surged, especially with younger consumers seeking affordable yet high-quality beverage options.
While Mixue’s stock price rose sharply on its debut, the reflections among individual franchise owners tell another story. Some franchisees expressed doubts about the IPO’s impact on their operations. One franchisee commented, "I’m preparing to sell my store. The excitement around the stock market doesn't translate to benefits for daily operations. It feels disconnected." Such sentiments indicate underlying challenges facing franchisees amid the company's rapid expansion.
The sentiment among franchise owners stems from intense market competition and rising operational costs. Some reported experiencing declining profits due to oversaturation, especially with multiple Mixue locations competing within close proximity. Observers noted, "Franchisee profits are shrinking, and many owners are reconsidering their investments as they face pressure to meet corporate demands and rising costs." This climate has raised questions about the long-term sustainability of the brand's growth model.
Despite concerns from individual operators, market analysts remain bullish about Mixue’s prospects. The driving force behind its success lies not only in its extensive network but also its strategy of targeting lower-tier cities where competition is less fierce. This approach has enabled Mixue to capture significant market share among consumers with varying income levels.
The dual strategy of maintaining “affordable luxury” through price-sensitive products alongside aggressive market penetration has led to notable sales growth figures over recent years. Mixue’s revenue jumped significantly, with reported earnings of approximately RMB 203 billion for 2023 and projections for continued growth through 2024.
Mixue’s investors have capitalized on the changing dynamics within the beverage sector, adjusting their market strategies to reflect consumer preferences. The brand is also leveraging technological advancements to improve supply chain management, ensuring lower costs and less waste, bolstering its competitive edge when appealing to cost-conscious consumers.
Reflecting on the IPO, one financial analyst noted, "The enthusiasm surrounding Mixue's listing not only sets it apart from its competitors but also revitalizes interest among investors and consumers alike. The ability to break the previous trend of declining stock prices for tea brands highlights the uniqueness of Mixue's appeal and operational execution." This differentiated market approach has undoubtedly captured the interest of younger generations increasingly drawn to value-driven shopping choices.
The strong debut signals more than just financial metrics; it poses broader questions for the tea and beverage industry—the potential for lucrative future offerings and the associated risks of market volatility. Whether Mixue can maintain its goose-like growth as the market stabilizes remains to be seen.
On its inaugural day, the overwhelming investor response serves as both validation and challenge as Mixue Ice Cream navigates its new status as a public entity. With future expansion plans and the need to balance the interests of its franchisees, ensuring sustained growth will require careful navigation of market expectations and operational realities. Time will tell if this debut foreshadows long-term success or if it faces the same fate as its predecessors.