The Snow King mascot on a cup at a Mixue retailer in Beijing, China, on Thursday, Feb. 27, 2025.
Bloomberg | Bloomberg | Getty Pictures
Shares of China’s largest bubble tea chain Mixue jumped as a lot as 38% on its market debut on Monday after a closely oversubscribed preliminary public providing.
Shares had been final seen buying and selling up roughly 38% at 279.6 Hong Kong {dollars} ($35.95) apiece, in comparison with the IPO provide value of HK$202.5 per share. The inventory had initally opened commerce at HK$267, in keeping with change information.
Mixue, which is thought for its milk tea, fruit drinks, ice cream and occasional, had supplied 17.06 million shares in its IPO, elevating a complete of HK$3.45 billion.
Shares of different Chinese language bubble tea corporations listed in Hong Kong traded decrease on Monday morning, erasing earlier features. Nayuki traded down 6.2%, whereas Sichuan Baicha Baidao stood 5.5% decrease. Guming fell 3.3%.
The IPO has gained the assist of 5 cornerstone buyers, which embrace M&G Investments, HongShan Development, Persistence Development Restricted, HHLR Fund and Meituan’s Lengthy-Z Fund.
Shares of Mixue had been extremely wanted, with the Hong Kong providing over 5,200 instances oversubscribed. The worldwide providing was greater than 35 instances oversubscribed.
The preliminary allocation of the IPO was 10% to the Hong Kong providing, and 90% to the worldwide providing.
Nonetheless, Mixue stated that as a result of Hong Kong providing being oversubscribed by greater than 100 instances of the entire variety of provide shares initially out there, it had elevated its share of the IPO from 10% to 50%, with the opposite 50% to the worldwide providing.
The bookrunners for the IPO had been Financial institution of America Securities, Goldman Sachs and UBS.
Traders ‘warming up’ to the bubble tea market
“Traders are warming as much as the bubble tea market once more,” stated Longdley Zephirin, principal and analyst at The Zephirin Group, including that Mixue’s IPO is an indication of how “hungry” buyers are.
Whereas Mixue is at present largely primarily based in Southeast Asia, the bubble tea chain might come to comply with fellow Chinese language tea drink chain, Heytea, in increasing into Europe and the U.S, Zephirin stated.
Mixue’s largest problem is shifting from tier two and tier three cities into tier one cities, the place most of its opponents like Nayuki and Heytea have retailers, Zephirin stated.
Whereas there isn’t a official classification, cities in China are sometimes categorized in sure tiers primarily based on elements reminiscent of gross home product (GDP) and inhabitants. Shanghai, Beijing and Guangzhou are extensively cited as first tier cities.
“Our base case valuation of Mixue Group is implied market cap of HKD 96 billion or goal value of HKD 254, which is 26% greater than the preliminary IPO value,” stated Douglas Kim, an IPO analyst at Douglas Analysis Advisory, who additionally publishes on Smartkarma.
