China’s Largest Bubble Tea Chain Mixue Soars 6% to HK$307 in morning trading after jumping more than 43% in its debut on the Hong Kong Stock Exchange Monday, with new listings in the city recording their strongest start to a year since 2021.

Mixue - known for its cheap drinks and red-cloaked Snow King mascot - raised $444 million in an initial public offering by selling 17 million shares in the deal at a fixed price of HK$202.5 each.

The shares rose as high as HK$298 in their first day of trading after opening at HK$262 each. The gains outpaced a 1% rise in Hong Kong's Hang Seng Index.

The stellar start reinforces hopes for a strong year in new equity issuances by Chinese companies in Hong Kong, as Beijing steps up support for its private enterprises to revive a slowing economy amid heightened geopolitical tensions.

The rebound in both retail and institutional investor sentiment is crucial for the financial hub's listings pipeline, with CATL, which hopes to raise at least $5 billion, and Chery Automobile aiming to launch offerings later this year.

Mixue's gain came as its major bubble tea rivals were sold off, with Sichuan Baicha Baidao down nearly 7% and Guming down 1.7% on Monday.

Retail investors in the IPO subscribed for 5,258 times more shares than were on offer in that tranche, according to Mixue's filings, making it one of Hong Kong's most popular IPOs.

The retail subscription rate was just below Bloks Group, whose retail book was 6,000 times oversubscribed, a record, in its January IPO.

The institutional tranche of the deal was 35 times covered, the filings showed.

There has been $1.44 billion worth of IPOs in Hong Kong year to date, making it the best start to a year since 2021, according to Dealogic data. So far in 2025, IPO debutantes have recorded an 11.7% gain on average on their first day of trade, well up on the 7.6% gain in 2024, the data showed.

IPO ATTRACTS STRONG RETAIL INTEREST

Mixue's high profile among Chinese consumers for selling drinks for as cheap as 6 yuan ($0.82) and a lack of IPOs in Hong Kong drove demand for the stock from retail investors, advisors on the deal said.

"Many Chinese tea chain stocks had dismal debuts and Mixue's 30% plus jump is a pleasant surprise to investors," said George Au, Phillip Securities deputy sales director.

"Some clients were so enthusiastic they brought their entire families to open accounts just to participate in this IPO."

Hong Kong's shortened IPO settlement period has prompted some of the city's brokerages to offer highly reduced margin loans to buy into new share sales, pushing up retail interest in offerings like Mixue.

"The cost for retail investors to subscribe has been reduced to close to zero, which is increasing their incentive to participate," said Dickie Wong, Kingston Securities executive director.

Founded in 1997 as a small ice shop in Zhengzhou, Henan province, Mixue has grown into a franchise giant with over 45,000 stores globally by September 2024, surpassing Starbucks' 40,576 stores worldwide.

Mixue is often seen as China's largest chain of iced drinks, milk tea, and ice cream. However, it operates more like a raw-material supplier than a traditional beverage brand, selling food materials, packaging, and equipment to thousands of franchisees, according to its filings.

Nearly all of its stores are run by franchisees, unlike Starbucks, which operates 53% of its stores directly.

In the first nine months of 2024, Mixue reported a net profit of 3.49 billion yuan, up from 3.19 billion yuan in the same period the previous year, according to its IPO filings.