Hong Kong – Mixue Ice Cream, formally known as Mixue Group, made a spectacular entry into the Hong Kong Stock Exchange on March 3, 2025. The company’s shares opened at HK$202.50 each, and by the end of the day, surged over 36% to reach approximately HK$277, driving its market capitalization to an impressive HK$1.04 trillion.
The initial public offering (IPO) saw an overwhelming response from investors, with the public offering attracting a massive HK$1.84 trillion in subscriptions. This figure represents a staggering 5,258 times the number of shares available for sale. International interest was also substantial, with subscriptions surpassing the number of shares offered by 35.23 times.
High-profile cornerstone investors such as M&G Investments, Sequoia China, and Hillhouse Capital were among the prominent participants, contributing around US$200 million (approximately HK$1.56 billion) in subscriptions. Their strong backing underscores Mixue’s robust positioning as it transitions to the public market.
The success of Mixue’s IPO stands in sharp contrast to recent tea brand IPOs, including Naixue Tea and Cha Bai Dao, which have struggled in the market, often seeing their share prices fall below their IPO levels. In contrast, Mixue’s soaring debut highlights investor confidence in its growth trajectory.
Mixue, which operates over 46,000 outlets globally, has emerged as a leader in the fresh beverage sector. The company has achieved remarkable sales figures, including the sale of 90 million cups and retail revenues nearing RMB 58.3 billion (USD 8.5 billion) by 2024. This rapid expansion has solidified Mixue’s status as the global leader in ready-to-drink beverages.
The IPO marks one of the largest subscription levels in the history of the Hong Kong Exchange, reflecting widespread investor optimism. The brand’s growing popularity, particularly among younger consumers seeking affordable, high-quality drinks, is seen as a major driver of this success.
Despite the strong performance of its stock, some franchise owners have expressed concerns over the impact of the IPO on their operations. One franchisee stated, “I’m preparing to sell my store. The excitement around the stock market doesn’t translate to benefits for daily operations. It feels disconnected.” These sentiments reveal challenges faced by franchisees amid Mixue’s rapid expansion.
The primary concern among franchisees is the increasing market competition and rising operational costs. Some have reported shrinking profits due to oversaturation, with several Mixue outlets located near each other, intensifying competition. Observers have noted that many franchisees are reconsidering their investments as they struggle to meet corporate demands and rising costs. This has sparked questions about the long-term sustainability of Mixue’s business model.
Despite these concerns, market analysts remain optimistic about Mixue’s future. The company has successfully tapped into lower-tier cities where competition is less intense, capturing significant market share among diverse consumer groups. This strategy, coupled with a focus on offering affordable luxury, has contributed to substantial revenue growth. Mixue’s reported earnings for 2023 were approximately RMB 203 billion, with continued growth projected for 2024.
Mixue’s ability to adapt to evolving consumer preferences, leverage technology for improved supply chain efficiency, and maintain competitive pricing positions the company well for future success. As one financial analyst observed, “The excitement surrounding Mixue’s listing not only sets it apart from competitors but also revitalizes investor and consumer interest in the beverage sector. Its ability to break the declining stock price trend of tea brands showcases its distinct market appeal.”
The company’s strong debut raises important questions for the beverage industry, highlighting both the potential for future success and the risks associated with market volatility. While Mixue’s growth has been exceptional, maintaining momentum in the face of competition and operational challenges will require strategic navigation.
As Mixue Ice Cream enters its new phase as a public company, its ability to balance rapid expansion with the interests of franchisees will be key to sustaining long-term growth. Whether the brand’s strong start leads to lasting success or faces hurdles like those encountered by other IPOs remains to be seen.
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