Bubble tea giant Mixue’s IPO powered by prowess in procuring, production, prices: analysts

The retail portion of the company’s Hong Kong debut attracted more than HK$1.6 trillion (US$205.9 billion) in subscriptions on Wednesday, according to a person familiar with the matter. In terms of margin loans, retail investors borrowed nearly HK$1.8 trillion from brokerages to subscribe.

Trading in Mixue’s shares starts on Monday.

As competition heats up in mainland China’s bubble tea industry, investor confidence is rooted in the company’s supply chain.

According to a recent prospectus, Mixue generates the bulk of its revenue by selling ingredients – milk, coffee and syrups – as well as equipment to its global network of over 45,000 franchisees. The model is powered by a “comprehensive end-to-end supply chain” that includes procurement, production, logistics, research and development and quality control.