China’s largest fresh-drink company Mixue Group aims to raise HK$3.45 billion (US$444 million) in a Hong Kong initial public offering (IPO) to expand its business amid heightened competition.
The company plans to sell 17.1 million shares at HK$202.50 each, according to a filing with the Hong Kong stock exchange on Friday. The stock is expected to begin trading on March 3.
Mixue has more than 45,000 stores in mainland China and 11 overseas markets in Southeast Asia, Australia, Japan and South Korea. It is known for its value-for-money freshly made fruit and tea drinks, ice cream and coffee, selling for about US$1, the company said.
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Founder and chairman Zhang Hongchao began the business in 1997 in Zhengzhou, the capital of inland province Henan, with a home-made shaved ice machine. In 2018, the firm introduced Snow King as its company logo and brand ambassador.
Mixue planned to use the IPO proceeds for production facilities, enhancing its brand and marketing, working capital and general corporate purposes, the filing said.
The company’s profit surged 45.2 per cent year on year to 3.5 billion yuan (US$483 million) in the first nine months of last year. It sold around 7.1 billion drinks during the period.
The IPO attracted five cornerstone investors, which subscribed to shares worth US$200 million: British asset manager M&G Investments, HongShan Capital’s growth fund, a unit of Boyu Capital, Hillhouse Group’s fund and Meituan’s Long-Z Fund.
The share offering follows peers Guming Holdings’ HK$1.81 billion listing earlier this month and Sichuan Baicha Baidao’s HK$2.6 billion IPO in April.
A Mixue shop in Mong Kok. The company opened its first store in Hong Kong in December 2023. Photo : RedNote alt=A Mixue shop in Mong Kok. The company opened its first store in Hong Kong in December 2023. Photo : RedNote>
Mixue’s supply-chain advantages and economies of scale put it ahead of peers and should translate to a higher valuation, analyst Xinyao Criss Wang said in a note published on investment intelligence platform Smartkarma. “But Mixue may have reached the growth ceiling in the China market based on its current expansion speed,” he added.
Guming’s shares finished their first day of trading 6.4 per cent below the IPO price, while Sichuan Baicha Baidao slumped 27 per cent in its debut.
