By LU Yibei

Budget bubble tea chain Mixue Bingcheng Co., Ltd. (MXBC) has submitted an application for listing on the Hong Kong Stock Exchange.

Proceeds from the IPO will be used to strengthen the supply chain, build IP, and speed up digitization.

As of September, MXBC had a total of 36,153 stores covering 11 countries, 99.8 percent of which are franchises. In the first nine months of 2023, MXBC achieved operating revenue of 15.4 billion yuan, up 46 percent. To put it in perspective, MXBC’s revenue is three times that of most of its peers currently in the process of going public.

The company's success lies in standardization and economies of scale. The menu is simple with an uncomplicated supply chain. Moreover, MXBC has a strong presence in lower-tier cities, reaching over 90 percent of county-level regions in China.

The company's franchise model is mature and easily replicable, contributing substantially to its revenue. MXBC emphasizes that its main revenue comes from selling goods and equipment to franchise stores, with only 2 percent of revenue derived from fees.

In 2023, Mixue Bingcheng sold approximately 5.8 billion cups of tea across its network, making it the top beverage enterprise in China and the second largest globally.