Cici Cao and Reuters

Shares of China's largest bubble tea and drinks chain Mixue Group (2097) jumped 43 percent higher on the first trading day in Hong Kong, giving a paper gain of HK$8,750 on per board lot of 100 shares.

It became the first mainland beverage stock to close above offering price on the debut.

Mixue sold 17 million shares in the deal at a fixed price of HK$202.5 each and raised HK$3.46 billion in the initial public offering.

The shares once climbed 47 percent and tipped HK$298, before closing up 43.21 percent at HK$290 - outpacing a 0.28 percent all-day rise in benchmark Hang Seng Index.

The retail subscription rate was just below Bloks Group (0325), whose retail book was 6,000 times oversubscribed, a record, in its January IPO.

Hong Kong retail investors applied for a record HK$1.84 trillion worth of margin loans to buy Mixue stock during the book-building process.

That exceeded the previous margin financing record of HK$1.3 trillion set by Ant Group for its IPO suspended by China in 2020 when Chinese regulators recommended tighter regulations for online micro-lending companies.

Founded in 1997, Mixue has grown into a franchise giant with over 45,000 stores globally by September 2024, surpassing Starbucks' 40,576 stores worldwide.

UBS, one of Mixue listing's joint sponsors, said that the highly anticipated IPO has a positive short-term impact on the tea beverage sector and further highlighted the Hong Kong stock market advantages on overseas market expansion.

However, state-owned Securities Times earlier published an article and cautioned investors to remain rational and mindful of potential risks.

The competitive nature of the tea market raises uncertainty about sustained high growth, said the article, noting prior three beverage stocks such as Guming (1364) all closed below offering price on the first trading day.

In February China bubble tea chain Guming, which is also known as GoodMe, closed over 6 percent lower than its offer price on its trading debut in Hong Kong.

Also, Sichuan Baicha Baidao (2555) and Nayuki (2150) closed 26.9 percent and 13.5 percent lower than their offer prices on their debuts, respectively.

Bubble tea giant soars 43pc in piping hot debut