China's Mixue Bingcheng and its budget coffee brand seeks to list in Hong Kong again

China’s fresh tea drinks giant Mixue Bingcheng has reapplied for an initial public offering in Hong Kong, together with its own coffee sub-brand Lucky Cup, as the competition at home remains fierce.

Compared with the application in early 2024, its number of stores added about 9,000 to over 45,000 spanning China and 11 overseas countries or regions. As of September 30, 2024, Mixue had over 19,000 franchisees.

Mixue’s net profit also surged 45 percent year-on-year to over 3.48 billion yuan (HK$3.7 billion) for the first nine months of 2024, which also exceeded the full-year earnings of 2023. 

Mixue highlighted in its new prospectus its “quality value-for-money” freshly-made fruit drinks, tea drinks, ice cream and coffee typically “US$1 (HK$7.8) per item”, together with its own coffee brand Lucky Cup.

Lucky Cup, established in 2017, sells coffee at as low as 5.9 yuan per cup, at least 40 percent cheaper than its domestic rival Luckin Coffee, which already beat US giant Starbucks last year with budget coffee.

While ranking the fifth largest freshly-made coffee brand in terms of gross merchandize volume in 2023, Lucky Cup only takes up 1.3 percent of the market share in China.

Mixue also said Lucky Cup had been an “immaterial contributor” to the company’s revenue and gross profit as of last September.

Themis Qi