Shares of China's largest bubble tea and drinks chain, Mixue Group, surged over 47% in their inaugural trading on the Hong Kong Stock Exchange on Monday, marking the strongest start to a year for new listings in the city since 2021.
Renowned for its affordable drinks and distinctive red-cloaked Snow King mascot, Mixue garnered $444 million in its initial public offering through the sale of 17 million shares at a fixed price of HK$202.5 each.
During their first day on the market, share prices for Mixue peaked at HK$298 after commencing at HK$262 per share, surpassing the 1% rise in Hong Kong's Hang Seng Index.
This impressive debut signals optimism for a robust year in new equity offerings by Chinese firms in Hong Kong, as Beijing bolsters support for the private sector to stimulate a slowing economy amid escalating geopolitical tensions.
The upswing in investor sentiment, both retail and institutional, is crucial for Hong Kong's listings pipeline, with firms like CATL, targeting a minimum of $5 billion, and Chery Automobile preparing to launch offerings later this year.
In contrast to Mixue's success, major rivals in the bubble tea market saw declines, with Sichuan Baicha Baidao dropping nearly 7% and Guming down 1.7% on Monday.
Marketed as one of Hong Kong's most sought-after IPOs, retail investors subscribed for shares at a rate 5,258 times more than available in that tranche, per Mixue's filings, just shy of Bloks Group, which registered a record-high 6,000 times oversubscription in its January IPO.
Institutional interest in the offering was 35 times oversubscribed, according to the documents.
To date, Hong Kong has seen $1.44 billion in IPOs, marking a strong start to the year vis-à-vis 2021, per Dealogic data. New entrants in 2025 have experienced an average 11.7% first-day gain, outperforming the 7.6% figure seen in 2024.
Thanks to Mixue's popularity among Chinese consumers for its budget-friendly drinks and the scarcity of IPOs in Hong Kong, retail demand for the stock soared, noted advisors on the deal.
Mixue, initially established in 1997 as a small ice shop in Zhengzhou, Henan province, has evolved into a franchise colossus boasting over 45,000 stores worldwide as of September 2024, surpassing Starbucks' global store count.
Though recognized as China's largest chain of iced drinks, milk tea, and ice cream, Mixue operates more like a supplier of raw materials, food packaging, and equipment to its numerous franchisees, according to its filings. The majority of its stores are operated by franchisees, a departure from Starbucks, which directly manages 53% of its outlets.
For the first nine months of 2024, Mixue posted a net profit of 3.49 billion yuan, up from 3.19 billion yuan in the corresponding period a year earlier, as stated in its IPO filings.
($1 = 7.2913 Chinese yuan renminbi, 7.7774 Hong Kong dollars)