Mixue Bingcheng, a Chinese ice cream and tea chain backed by Hillhouse Capital Group and food delivery giant Meituan, is opening its first store in Hong Kong ahead of an initial public offering (IPO) in the city.
Mixue, with 32,000 locations globally across countries including China, Vietnam, and Indonesia, is setting up its first store in Mong Kok, one of the city’s most buzzing and populated areas.
Its decision to bring the franchise to Hong Kong comes as the firm is reportedly eyeing a first-time share sale in the city. Mixue has already selected Bank of America, Goldman Sachs, and UBS to arrange the Hong Kong listing to target about $1 billion next year, International Financing Review (IFR) reported in October.
Founded in 1997 by Zhang Hongchao and his brother Zhang Hongfu, Mixue focuses on the low-end market by pricing most of its products below 10 yuan ($1.4).
It raised over 2 billion yuan ($274.6 million) in its first funding round in 2021 from investors including Meituan’s DragonBall Capital, Hillhouse Capital Group, and CITIC Private Equity (CPE) at a post-money valuation of 20 billion yuan ($2.7 billion).
The firm is circling back to the Chinese Special Administrative Region after building a presence across approximately 10 overseas markets.
In 2018, Mixue opened its first overseas store in Hanoi, the capital of Vietnam, before expanding into Indonesia in 2020. In the years that followed, Mixue extended its footprint to more countries covering Singapore, the Philippines, Malaysia, South Korea, and Japan.
The total number of its overseas stores nears 4,000 versus approximately 28,000 stores in mainland China, the group vice president Bai Di told the state-owned television network Xinhua TV in a recent interview.
Mixue is one of at least six Chinese bubble tea makers weighing a public listing in Hong Kong or the US, after Chinese regulators issued guidelines earlier this year discouraging certain types of companies from listing on the domestic stock market, according to a Bloomberg report in July.
Food and beverage chains were said to be among companies banned from listing on mainland China’s exchanges, driving brands such as Auntea Jenny, ChaBaiDao, Chase, GoodMe, and XSQ Tea to consider a listing elsewhere.
Mixue last year applied for a 6.5 billion yuan ($892.6 million) public listing in Shenzhen, which has since been put on hold.
Its annual revenue in 2021 was almost 10.4 billion yuan ($1.4 billion), which more than doubled its 2020 revenue of 4.7 billion yuan, according to its prospectus filed with the China Securities Regulatory Commission (CSRC) in September 2022.
Its net profit was approximately 1.9 billion yuan ($261 million) in 2021, tripling that of the previous year.