You love me, I love you, Mixue Ice Cream & Tea sweetens you. --Mixue Ice Cream & Tea IPO.
The long-awaited IPO of Mixue Bingcheng is finally here.
1. Basic Introduction
The group is a leading freshly-made beverage company, focusing on providing high-quality, affordable products such as freshly-made fruit drinks, tea drinks, ice cream, and coffee to consumers at an average price of around 6 RMB (approximately 1 USD).
Share Issuance:
Global offering of 17.0599 million H-shares, with 1.706 million shares for Hong Kong public offering and 15.3539 million shares for international offering, plus a 15% over-allotment option.
Clawback Mechanism:
If the public offering is undersubscribed while the international offering is fully subscribed: the undersubscribed portion will be reallocated to the international offering.
If the international offering is undersubscribed: it can be reallocated to up to 20% of the total offering, subject to pricing at the lower end.
If the international offering is fully subscribed and the public offering is oversubscribed by less than 15 times: it can be reallocated to up to 20% of the total offering, subject to pricing at the lower end.
If the public offering is oversubscribed by 15 times or more but less than 50 times: reallocate to 30%.
If oversubscribed by 50 times or more but less than 100 times: reallocate to 40%.
If oversubscribed by 100 times or more: reallocate to 50%.
Offer Price: HKD 202.5.
One lot consists of 100 shares, with an entry fee of HKD 20,454.22.
Cornerstone Investors:
UK asset management giant M&G Investments, HongShan Growth under Sequoia China, Persistence Growth Limited under Boyu Capital, HHLR Fund, L.P. under Hillhouse Group, Long-Z Fund I, LP under Meituan Longzhu, etc.
Cornerstone investors account for 45% of the offering.
Subscription Period: February 21, 2025 - February 26, 2025
Listing Date: March 3, 2025
Sponsors: Goldman Sachs, UBS
2. Fundamentals
The group operates the freshly-made tea brand "Mixue Bingcheng" and the freshly-ground coffee brand "Lucky Cup". As of September 30, 2024, the group's franchise network had over 45,000 stores, covering China and 11 overseas countries.
During the performance record period, the group's revenue mainly came from selling store materials (including ingredients and packaging) and equipment to franchisees under the franchise model. Geographically, the group primarily focuses on China, with minimal revenue from overseas. In 2023 and the nine months ended September 30, 2024, the group's store network sold approximately 7.4 billion and 7.1 billion cups of beverages, respectively.
According to a report by CIC, as of September 30, 2024, the group is the largest freshly-made beverage company in China and globally by store count. By beverage cup sales in 2023, the group ranks first in China and second globally. By retail sales in 2023, the group is also the largest in China and the fourth globally, with market shares of approximately 11.3% in China and 2.2% globally.
The prospectus shows that in 2022, 2023, and the first three quarters of 2024, Mixue Bingcheng's revenue reached RMB 13.6 billion, RMB 20.3 billion, and RMB 18.7 billion, respectively, with net profits of RMB 2 billion, RMB 3.2 billion, and RMB 3.5 billion. The gross margin for the first three quarters of 2024 was 32.4%.
3. Market Trends
Bull market for China concept stocks.
4. Commentary
The most interesting aspect of Mixue is:
The company was established in 1997, and its stock code is 2097—is this aiming for a century-old brand?
This year is 2025, and the offer price is HKD 202.5.
Interesting.
Valuation at RMB 76.2 billion, with a net profit of RMB 3.5 billion in the first three quarters of 2024. A rough estimate for the full-year profit would be RMB 3.5/3*4 = RMB 4.66 billion.
PE = 76.2 / 4.66 = 16.35
ChaPanda's PE is 16, and Gu Ming's PE is 18.
The offering is priced at a normal level.
All tea beverage stocks debuted below their offer prices: Nayuki fell 13.5% on its first day, ChaPanda fell 27%, and Gu Ming fell 6.4%.
Can Mixue Bingcheng break the curse? Let's wait and see.
$MIXUE GROUP(02097.HK) $GUMING(01364.HK) $CHABAIDAO(02555.HK)
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