Mixue reaps sweet gains as stock soars on HK debut

Mixue Group,  the largest fresh drinks producer in the Chinese mainland by retail market share, made a strong debut on the Hong Kong stock exchange, opening 29 percent above its initial public offering price at HK$262 ($33.59) per share.

The listing underscores the growing investor interest in China’s freshly made tea beverage sector, which has emerged as one of the hottest categories recently.

Both Mixue and Guming operate under a franchise-based business model, where revenue primarily comes from franchisee purchases of company-supplied ingredients and materials. This asset-light model has enabled rapid expansion.

Founded in 1997, Mixue operates 45,000 stores globally, of which 99 percent are franchised outlets.

Targeting lower-tier cities, Mixue’s products are priced between 6 yuan ($0.82) and 8 yuan.

Despite the low prices, Mixue has demonstrated strong financial growth, driven by its vast store network and cost-efficient supply chain.

A Mixue mascot strikes a gong during the company’s listing ceremony at the Hong Kong bourse on Monday. LAM YIK/REUTERS

In 2023, the company generated 20.3 billion yuan in revenue, with net profit rising nearly 58.3 percent year-on-year to 3.2 billion yuan. In the first nine months of 2024 alone, revenue reached 18.7 billion yuan, while net profit climbed 42.3 percent to 3.5 billion yuan.

Over the period, Mixue sold about 7.4 billion cups of freshly made drinks, showing its dominant market presence.

The company’s competitive edge lies in its vertically integrated supply chain, which provides cost advantages and operational efficiency.

Mixue sources key ingredients from 38 countries and regions and operates five major production bases across China.

Mixue also operates an extensive warehousing and distribution network, ensuring fast and cost-effective supply to its franchisees. The company has built 26 warehouses across China, covering a total area of over 300,000 square meters. As of Sept 30, 2023, Mixue had achieved 12-hour delivery coverage across more than 90 percent of county-level markets.