Chinese Bubble Tea Giant Mixue Sees Strong Stock Market Debut

Chinese bubble tea and ice cream chain Mixue Ice Cream and Tea made a strong entrance into the Hong Kong Stock Exchange on Monday, with its shares surging by more than 40% on their first day of trading.

The company raised $444 million in what was the largest initial public offering (IPO) in Hong Kong this year.

Despite being less known outside of China, Mixue has more locations than Starbucks and McDonald’s. With over 45,000 outlets across China and 11 other countries, including Singapore and Thailand, it has grown into one of the world’s largest food and beverage chains by store count. By comparison, McDonald’s operates over 43,000 locations, while Starbucks has 40,576 stores globally.

Founded in 1997 by Zhang Hongchao as a small ice cream shop in Henan province, Mixue initially struggled before finding success with low-cost soft-serve ice cream and beverages. Today, the brand is known for its budget-friendly offerings, with products priced between 6 and 8 Chinese yuan ($0.82 to $1.20).

Unlike Starbucks, which directly operates a large percentage of its stores, Mixue follows a franchise model, where nearly all its stores are run by independent operators. Most of the company’s revenue comes from selling ingredients, equipment, and packaging to its franchisees rather than from direct retail sales.

Mixue’s affordable pricing has helped it gain a loyal customer base, particularly as China faces economic headwinds, including a property crisis and weak consumer confidence. The company’s pricing strategy has been key to its growth, attracting cost-conscious consumers in both major cities and smaller towns.

The IPO comes at a time when similar tea brands have had mixed stock market performances. Smaller rival Guming saw its shares fall on its first day of trading in February, and another bubble tea brand, Chabaidao, also experienced a decline after its IPO. However, Mixue’s strong start suggests investor confidence in its growth potential.

Despite its already massive footprint, Mixue has ambitious expansion plans, particularly in overseas markets. The company has been growing its presence in Southeast Asia, with outlets in Indonesia, Vietnam, Malaysia, and Singapore.

Analysts suggest that Mixue’s future growth will largely depend on its ability to expand internationally and navigate China’s highly competitive bubble tea market. Some investors are betting on the brand’s potential to replicate its low-cost success abroad.

BBC, CNN, and Business Insider contributed to this report.