Shares of the popular bubble tea brand Mixue Group surged in its debut on the Hong Kong stock market, attracting strong demand from investors eager to buy into the fast-growing milk tea company. The Zhengzhou-based brand, known for its signature snowman mascot, saw its stock price open at HK$262, a 29.3% jump from the offer price of HK$202.50. By the close of trading, shares had surged a further 43%, reaching HK$290, significantly outperforming the Hang Seng Index’s modest 0.3% gain.
The opening price valued Mixue at HK$99 billion (US$12.7 billion), according to its listing prospectus. Demand for the stock was overwhelming, with retail investors subscribing for 5,258 times more shares than the available offering. This made Mixue’s IPO one of Hong Kong’s most popular in recent months. Retail investors borrowed nearly HK$1.83 trillion through brokerages, surpassing records set by high-profile IPOs such as Ant Group and Kuaishou Technology.
Despite the market’s cautious sentiment, analysts like Kenny Wen, head of investment strategy at KGI Asia, noted that the stock’s rally exceeded expectations. He attributed the strong reception of Mixue’s IPO to the company’s healthy profit margins, growing revenue, and the current investor optimism, which could help bolster the IPO market this year.
Mixue’s IPO follows that of its competitor, Guming, which saw a 13% increase since its debut on February 12. Other consumer-focused stocks have also experienced gains, buoyed by improving market sentiment. With expectations high, analysts predict Hong Kong’s IPO market could raise US$22 billion this year, with major deals like the upcoming share sale from electric-vehicle giant Contemporary Amperex Technology (CATL).
Founded in 1997, Mixue initially started as a small ice cream company in Zhengzhou before expanding rapidly into the beverage industry, now operating more branches than its competitors across mainland China. The company’s business model relies heavily on providing milk, coffee, syrups, and equipment to its vast network of over 45,000 franchisees, reducing procurement costs and allowing for competitive pricing.
The brand’s success is also attributed to its strong brand identity, driven by its mascot, Snow King, which resonates with younger consumers. As Mixue continues to expand globally, its IPO debut has sparked optimism in the Hong Kong market, highlighting its potential for long-term growth.
Read more:
