Hong Kong’s latest mega-IPO comes from a brand unfamiliar to U.S. investors, yet is also a household name to many throughout China and the rest of Asia thanks to snacks and drinks that can sell for as low as $1.
Shares in Mixue, a Chinese ice cream and bubble tea chain, surged over 40% on Monday, the first day of trading after an IPO that raised 3.45 billion Hong Kong dollars ($444 million).
Mixue was founded in 1997 in China’s central Henan province, and is now a food and beverage giant with over 45,000 stores, primarily in mainland China but also Indonesia, Vietnam, Malaysia, South Korea and Australia. Mixue’s store count is greater than McDonald’s or Starbucks.
The company’s blockbuster offering, the largest so far this year in Hong Kong, also signals a revival of public offerings in the Chinese city, after a years-long slump.
Chinese companies have long used Hong Kong as a place to raise money, but the city has struggled to keep up the pace of listings amid China’s economic slowdown and Beijing’s tighter scrutiny of overseas IPOs. Hong Kong’s IPO fundraising sank for three straight years between 2021 and 2023.
But now, the tide may be turning. Last year, 71 Hong Kong IPOs raised 87.5 billion Hong Kong dollars ($11.3 billion), an 89% year-on-year increase in funds raised. Last September’s listing from home appliance maker Midea raised around $4 billion, the city’s largest IPO for 2024 and a signal of a possible turnaround.
Hong Kong Exchanges and Clearing, which operates the city’s stock exchange, reported a record fourth-quarter revenue of 6.4 billion Hong Kong dollars ($820 million), a 31% year-on-year jump.
There are “encouraging signs of economic revitalization, with stimulative policies in mainland China and interest-rate cuts in other major markets providing renewed vibrancy to Hong Kong’s fundraising and secondary markets,” HKEX CEO Bonnie Chan said in a statement accompanying the bourse operator’s earnings release last week.
And there are more blockbuster IPOs in the works.
CATL, the world’s top supplier of electric vehicle batteries, filed for a Hong Kong listing in early February. (The company’s shares already trade in Shenzhen). The IPO could raise more than $5 billion, according to Bloomberg, which would make it the city’s largest listing since Kuaishou’s $6.2 billion debut in early 2021.
On Friday, Chery Automobile, China’s second largest automaker and the country’s largest car exporter by volume, applied for its own IPO in Hong Kong. It did not detail the size of the IPO, or when it might happen. Chery Holding Group made its Global 500 debut last year, with 2023 revenue of $39.1 billion, putting it at No. 385.