Mixue Will IPO On Hong Kong Stock Exchange, Targeting Fresh Funds Of IDR 15.49 Trillion

JAKARTA - Two leading bubble tea producers in China, Mixue Group and Guming Holding submitted an initial public offering (IPO) in Hong Kong.

Launching CNN Business, Thursday, January 4, based on its report, Mixue hopes to raise funds of up to 500 million US dollars equivalent to Rp7.75 trillion to 1 billion US dollars equivalent to Rp15.49 trillion.

Meanwhile, Guming Holding targets IPO funds of US$300 million, equivalent to Rp4.65 trillion to US$500 million, equivalent to Rp7.75 trillion. This cites unnamed sources.

Mixue declined to comment, while Guming did not immediately respond to a request for comment.

Although China is grappling with high economic uncertainty and low consumer confidence, cinemas and cheap foods and beverages are seen as a bright spot for the economy.

As is known, the bubble tea market in China is quite large. In 2023, the industry is estimated to be worth 145 billion yuan (20.4 billion US dollars), according to a report by the China Chain Store & Franchise Association.

Mixue, which the company says means'salju sweet like honey' in English, has more than 36,000 stores across mainland China and 11 overseas markets, such as Vietnam and Malaysia.

The company started with another name Coldsnap in 1997, selling exciting ice at a small shop in the city of Zhengzhou, central China. Two years later, its founder introduced the name of the Mixue brand.

In 2005, the company started selling soft ice cream at a price of only 1 yuan (about 15 US cents), which quickly became its first best-selling product and flagship product.

Currently, the chain has put low prices across its menu, selling lots of items for just 1 US dollar. The best-selling products include ice cream, chickenhead, and bubble tea, also called BOBa.

This has helped Mixue, which is associated throughout China with its cheerful snowman logo, to become market leader. In the nine months ended in September 2023, the company held the leading position in the country's fresh beverage sector, by controlling 11.2 percent of the market and resulting in sales of 34.6 billion yuan (4.9 billion US dollars) during that period.

Meanwhile, Guming calls the second largest bubble tea network in China, with 9,000 stores in 200 cities in mainland China. The company's name means older tea' in English and launched in 2010 in Zhejiang province, eastern China.

Guming's strategy is largely focused on serving consumers outside the Chinese metropolitan city, with 79 percent of its stores in cities considered to be at second or lower levels, according to its prospectus.