Mixue Group, the operator of China’s largest bubble tea chain, is set to raise HK$3.45 billion (approximately $444 million) through an initial public offering (IPO) in Hong Kong. The funds will be used to strengthen its market position as it faces fierce competition in the rapidly growing bubble tea industry. Trading is expected to begin on March 3.
The company plans to sell 17.06 million shares at HK$202.50 each, with an option to increase the number of shares based on demand. The IPO marks an important step for Mixue as it looks to expand further and solidify its dominance in the marketplace, which has become highly competitive, with vendors regularly engaging in price wars. The bubble tea market in mainland China is projected to reach $71 billion by 2027, up from $9.6 billion in 2018.
Mixue’s unique position as a budget-friendly brand, alongside its vast supply chain, gives it a competitive edge over other bubble tea chains like Nayuki and Guming, according to Bloomberg Intelligence analyst Angela HanLee. This advantage, combined with the company’s aggressive expansion plans, helps Mixue maintain its lead in the industry.
The company, which now boasts more than 45,000 stores globally—outnumbering Starbucks—has already seen significant demand for its IPO. Investors, including Hillhouse Investment, HongShan Capital Group (formerly Sequoia China), and Meituan’s Long-Z investment arm, have committed to the offering and will hold their shares for at least six months.
Mixue’s revenue grew 21% to 18.7 billion yuan ($2.6 billion) in the first nine months of 2024, with profits rising 42%. The brand’s core drinks, priced between 2 yuan and 8 yuan, are more affordable than competitors, which has helped Mixue attract a large customer base across China and beyond.
This IPO comes after other bubble tea brands like Guming and Sichuan Baicha Baidao have also sought to go public, but with mixed success due to intense competition within the sector. Mixue, however, continues to stand out with its massive store network and commitment to offering quality drinks at budget-friendly prices.
As the bubble tea market expands, Mixue is poised to strengthen its position with the IPO proceeds, keeping ahead of competitors in this fast-paced industry,
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