On Thursday, February 27th, 2025, a snowking mascot was in a cup at a mix store in Beijing, China.
Bloomberg | Bloomberg | Getty Images
China's largest bubble tea chain mix stocks jumped over 40% on its market debut on Monday, resulting in an over-registering first public offering.
The stock was last seen growing about 41% at HK$285.8 ($36.52) compared to the IPO offer offer price and the price of HK$202.5 per share. The stock was first trading at HK$267, according to Exchange data.
Known for milk tea, fruit drinks, ice cream and coffee, Mix provided 17.06 million shares at IPO, raising a total of HK 3.45 billion.
Shares of other Chinese bubble tea companies listed in Hong Kong fell on Monday morning, expunging previous profits. Nayuki fell 6.2%, while Sichuan Baicha Baidao fell 5.5%. Gumming fell by 3.3%.
The IPO has gained support from five Cornerstone Investors, including M&G Investments, Hongshan Growth, Persistence Growth Limited, the HHLR Fund and Meituan's Long-Z Fund.
Mix's stocks are extremely popular, with Hong Kong offering over 5,200 times more oversubscribe. International products have been subscribed over 35 times.
The initial allocation of the IPO was 10% for Hong Kong's provisions and 90% for international provisions.
However, Mixue said that Hong Kong's offerings have been oversubscribed by more than 100 times the total number of available offer stocks first, resulting in an increase in the shares of IPOs from 10% to 50%, while the other 50% have increased to international products.
The BookRunners of the IPO were Bank of America Securities, Goldman Sachs and UBS.
“Warm up” for investors in the Bubble Tea Market
“Investors are once again warming up to the bubble tea market,” said Longdree Zephyrin, principal and analyst at Zephyrin Group, adding that the mix's IPO is a protest for “starved” investors.
Mixue is currently based primarily in Southeast Asia, but the bubble tea chain may follow China's tea drink chain Heytea when it expands to Europe and the US, Zephirin says.
The biggest challenge in the mix is moving from Tier 2 and Tier 3 cities to Tier 1 cities. There, most of their competitors, such as Nayuki and Heitea, have outlets, Zephyrin said.
Although there is no official classification, Chinese cities are often categorized into specific classes based on factors such as gross domestic product (GDP) and population. Shanghai, Beijing and Guangzhou are widely cited as the first tier cities.
“The Mix Group's base case valuation implies a market capitalization of HKD 96 billion or a target price of HKD 254, which is 26% higher than the initial IPO price.”
