On Monday, Mixue Ice Cream and Tea, the largest bubble tea chain in China, launched its shares on the Hong Kong Stock Exchange, concluding its initial public offering (IPO) with a considerable increase, despite the economic challenges faced in China.
Mixue Ice Cream and Tea Surges on Hong Kong Stock Exchange Debut
Mixue Ice Cream and Tea Surges on Hong Kong Stock Exchange Debut
Chinese bubble tea giant Mixue experiences a 40% share price rise on its first trading day.
Mixue Ice Cream and Tea, a relatively unknown name outside of its home country, gained substantial attention as it debuted on the Hong Kong Stock Exchange with an impressive 40% increase in share value. Originating from China, the chain has established itself with more outlets than both McDonald's and Starbucks, boasting over 45,000 stores in China and abroad, including locations in Singapore and Thailand. The company's IPO raised $444 million, marking it as the biggest of the year for Hong Kong.
Founded in 1997 by Zhang Hongchao while he was a student, Mixue started as a means to support his family financially. The brand’s full name, Mìxuě Bīngchéng, translates to "honey snow ice city," reflecting its focus on iced drinks and ice creams, priced average at around six Chinese yuan (approximately $0.82). Its popularity continues to grow despite the ongoing economic difficulties in China, such as a property crisis and fluctuating consumer confidence.
In comparison to major global fast food chains, Mixue adopts a unique business model, primarily operating through franchisees, unlike Starbucks which directly manages over half of its locations. This distinction positions Mixue as a raw-materials supplier rather than a traditional franchise brand.
This strong debut contrasts with that of other recent entrants in the bubble tea market, like local competitor Guming, whose shares dropped on the first day of trading, suggesting a fluctuating market environment for bubble tea franchises in China. As Mixue seeks further expansion, the question remains: is there room for growth in an industry that may be facing saturation?
Founded in 1997 by Zhang Hongchao while he was a student, Mixue started as a means to support his family financially. The brand’s full name, Mìxuě Bīngchéng, translates to "honey snow ice city," reflecting its focus on iced drinks and ice creams, priced average at around six Chinese yuan (approximately $0.82). Its popularity continues to grow despite the ongoing economic difficulties in China, such as a property crisis and fluctuating consumer confidence.
In comparison to major global fast food chains, Mixue adopts a unique business model, primarily operating through franchisees, unlike Starbucks which directly manages over half of its locations. This distinction positions Mixue as a raw-materials supplier rather than a traditional franchise brand.
This strong debut contrasts with that of other recent entrants in the bubble tea market, like local competitor Guming, whose shares dropped on the first day of trading, suggesting a fluctuating market environment for bubble tea franchises in China. As Mixue seeks further expansion, the question remains: is there room for growth in an industry that may be facing saturation?
