BRIEF: Mixue serves up $444 million IPO

Leading bubble tea chain operator Mixue Group (2097.HK) launched its Hong Kong IPO share sale on Friday, saying it would sell about 17 million shares for HK$202.50 apiece to raise HK$3.45 billion ($444 million). Shares will be sold in lots of 100 at a price of HK$20,454 per lot. The stock will make its trading debut on March 3.

Mixue recorded revenue of 18.66 billion yuan in the first nine months of last year, up 21% year-on-year, while its profit rose 45.2% to 3.49 billion yuan over that time. Its gross profit margin was 32.4% for the nine-month period. The company had 45,000 stores across China and 11 other countries as of last September, and sold 7.1 billion cups of drinks during the nine-month period.

China’s bubble tea industry is facing intense competition, eroding profits at many companies and even sending some into the red. Shares of smaller rival Guming (1364.HK) fell 6.4% on their first trading day earlier this month, though they have recovered those losses since then.

Mixue will use proceeds from its listing to further improve its supply chain and products, expand its production capacity and strengthen its brand.

By Lau Chi Hang

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