Mixue’s mascot, the Snow King, took the stage at the bubble tea chain’s IPO ceremony at the Hong Kong stock exchange on March 3, 2025.
Shanshan Kao/ Forbes Asia
Shares of Mixue Group, China’s largest bubble tea chain controlled by billionaire brothers Zhang Hongchao and Hongfu, jumped 43.2% in its highly anticipated Hong Kong stock market debut on Monday, boasting a market cap of $14.1 billion.
The company, best known for selling freshly-made drinks for about $1, ended its first trading day at HK$290, up from its IPO price of HK$202.5 apiece. The company raised HK$3.45 billion ($444 million) from the IPO, which attracted a raft of cornerstone investors, including Chinese investment firms Hongshan and Boyu Capital, as well as existing backers Hillhouse and Meituan-backed fund Long-Z. Mixue said it will use the proceeds mostly to expand its supply chain and ramp up production capacity for food ingredients and store equipment.
The two brothers, Hongchao, Mixue’s 48-year-old chairman, and Hongfu, its 40-year-old CEO, are the largest shareholders of the company, each holding close to a 41% stake. Following the listing, they are now worth an estimated $5.8 billion each. The brothers joined Forbes’ billionaire ranks in January 2024, when Mixue first filed for a Hong Kong IPO. That application lapsed in a lukewarm market, and Mixue filed a fresh application last month.
While the brothers were not on stage at the IPO ceremony on Monday morning, Mixue sent its roly-poly mascot to mark the official trading start. The Snow King, dressed in a crown and a red cape, took the stage to strike a ceremonial gong and then dance when the company’s theme song, “I Love You, You Love Me, Mixue Ice Cream & Tea,” started playing.
Mixue has its roots in a small stall selling shaved ice treats in the central Chinese city of Zhengzhou, which Hongchao founded in 1997. At the time, Hongchao reportedly borrowed 3,000 yuan ($414) from his grandmother to open Coldsnap Shaved Ice, the predecessor of Mixue, serving the desserts to customers with a homemade ice shaver.
Two years later, Hongchao opened another shaved ice stall called Mixue Bingcheng, meaning “sweet snow palace.” He first tasted success in 2005, when Mixue launched soft-serve ice cream, which became a big hit thanks to its competitive pricing. Hongchao continued to expand the menu, adding items such as lemonade, coffee and bubble tea. Mixue’s offerings, which cost between three cents to roughly $1, are the cheapest among major Chinese bubble tea chains as of 2023, according to its prospectus. It has earned the nickname of “Pinduoduo of bubble tea,” after billionaire Colin Huang’s popular Chinese discount e-commerce platform.
Mixue has more than 40,000 stores in China and nearly 4,800 shops in 11 mostly Asian countries.
Shanshan Kao/Forbes Asia
Hongfu joined Mixue in 2007 and developed what later became the company’s successful franchise model. Mixue has more than 40,000 stores in China and nearly 4,800 shops in 11 mostly Asian countries, with over 99% of them being franchised. The company sold 7.4 billion cups of drinks in 2023, making it China’s largest freshly-made drinks company and the world’s second largest after Starbucks, it said in its prospectus, citing China Insights Industry Consultancy.
In the first nine months of 2024, Mixue’s revenue rose 21% year-on-year to 18.7 billion yuan ($2.6 billion). The company generated almost 98% of its revenue from selling goods and equipment, such as food ingredients and ice cream makers, to franchisees, with the rest coming from franchise fees. During the same period, net profit jumped 42% to 3.5 billion yuan. The company attributed the growth to its expanded store network. It also cited the enhanced efficiency of its supply chain, which it said is China’s largest in the freshly-made drinks industry, covering everything from procurement, production to quality control.
Mixue’s average cup sales per store, however, dropped some 4% year-on-year to nearly 171,000 in the nine months of 2024. The company said that decline was due to an industry slowdown and intensifying competition. China has about 660,000 freshly-made drinks shops, according to the prospectus, and some sellers were willing to cut prices to capture penny-pinching consumers. To maintain its edge, Mixue said it will press ahead with its overseas expansion and create more content featuring its well-known mascot.
Hongchao and Hongfu join a growing legion of Chinese entrepreneurs who have made their fortune from selling bubble tea, a sweet drink filled with chewy tapioca balls that has captivated a growing number of millennials and Gen Z. Wang Yun’an, founder and chairman of Guming Holdings, joined the three-comma club last month after his bubble tea chain went public in a $233 million Hong Kong IPO.
Investors, however, have become wary about the industry’s intensifying competition. Wang Xiaokun, founder and chairman of Sichuan Baicha Baidao Industrial, which operates the Cha Panda chain, dropped off the billionaire ranks after the company’s shares fell 18% since their Hong Kong market debut last April. Meanwhile, Peng Xin and Zhao Lin, the husband-and-wife duo behind Nayuki Holdings, lost their billionaire status as the company’s stock price plunged 90% since its Hong Kong listing in 2021.
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