On January 2, the Star Daily reported (Reporter Xu Cihao) that "Snow King" MIXUE ICE CITY is once again sprinting for its IPO on the Hong Kong stock market.

According to official disclosures from the Hong Kong Stock Exchange, MIXUE ICE CITY Co., Ltd. (hereinafter referred to as MIXUE ICE CITY) updated its listing application with the Hong Kong Stock Exchange last night, intending to apply for listing on the Main Board, with Bank of America, Goldman Sachs, and UBS Group as joint sponsors.

This is not the first time that MIXUE ICE CITY has ventured into the Capital Markets. As early as September 2022, there were rumors that MIXUE ICE CITY planned to land on the Shenzhen Stock Exchange Main Board, intending to raise 6.496 billion yuan, but there was no further news afterward. In January 2024, MIXUE ICE CITY disclosed its prospectus for an IPO in Hong Kong; however, it expired six months later.

It is worth mentioning that in 2024, besides Tea Baidao, MIXUE ICE CITY, Gu Ming, and Shanghai Auntie have successively applied for listing on the Hong Kong Stock Exchange but their applications expired six months later. Recently, with Gu Ming, Shanghai Auntie, and MIXUE ICE CITY once again submitting their prospectuses, a new round of competition for the "third company in new tea drinks" has officially begun.

According to Zhu Danpeng, an Analyst in the CHINA FOODS industry, as the company with the most stores in China’s new tea drink market, MIXUE ICE CITY occupies a leading position in brand effect, scale effect, profit effect, and fan effect, and its entire Industry Chain layout also has differentiated core advantages. "If MIXUE ICE CITY goes public, it may give higher valuations to new milk tea companies in the Hong Kong stock market."

There are over 0.045 million stores worldwide, with only 20 self-operated.

MIXUE ICE CITY was established in Zhengzhou, Henan in 1997, with its main products being freshly made tea drinks, fruit drinks, and ice cream.

Currently, Mixue Bingcheng has two main brands, Mixue Bingcheng and Lucky Coffee, expanding its store network through a franchise model. As of September 30, 2024, Mixue Bingcheng has developed a store network of 45,302 stores in China and abroad through the franchise model. Among them, over 99% of the stores are franchise stores. According to the prospectus, as of September 30, 2024, Mixue Bingcheng has 20 self-operated stores worldwide, including 19 in mainland China and 1 outside mainland China; while from 2021 to 2023, the number of stores was 47, 54, and 49 globally.

According to a report by Zrac Consulting, based on the number of stores as of September 30, 2024, Mixue Bingcheng is the largest ready-made beverage company in China and globally. In 2023 and the first nine months of 2024, Mixue Bingcheng achieved beverage sales volumes of approximately 7.4 billion cups and 7.1 billion cups, respectively.

In terms of performance, the prospectus shows that the network of Mixue Bingcheng stores achieved terminal retail sales of approximately 22.8 billion yuan, 30.7 billion yuan, 47.8 billion yuan, and 44.9 billion yuan for the years 2021, 2022, 2023, and the first nine months of 2024, respectively; revenues were 10.351 billion yuan, 13.576 billion yuan, 20.302 billion yuan, and 18.66 billion yuan, respectively; net incomes were 1.912 billion yuan, 2.013 billion yuan, 3.187 billion yuan, and 3.491 billion yuan, respectively.

Mixue Ice City’s business model mainly involves selling the ingredients, packaging materials, equipment, facilities, and operational materials required for making various freshly made beverages and ice cream to franchisees, while also providing franchise management services, and directly selling freshly made beverages and ice cream to consumers through self-operated stores.

The prospectus indicates that from 2021 to September 30, 2024, the revenue from Mixue Bingcheng franchise stores was 10.031 billion yuan, 13.102 billion yuan, 19.575 billion yuan, and 18.203 billion yuan, respectively. However, during the reporting period, only 1.9%, 2.0%, 2.0%, and 2.4% of the revenue came from franchise fees and related service fees, with the vast majority coming from the sale of commodities and equipment to franchise stores. The revenue situation for self-operated stores was 0.083 billion yuan, 0.072 billion yuan, and 0.108 billion yuan from 2021 to 2023, amounting to 0.039 billion yuan as of September 30, 2024.

In this regard, Mixue Bingcheng explained in the prospectus that the company mainly uses the franchise model to expand its store network, with self-operated stores primarily opened to gain joint insights and strengthen the brand. For the entire year of 2023 and the first nine months of 2024, the number of closed or transferred franchise stores increased, mainly due to the expansion of business scale and enhancement of brand reputation, enabling the store network to grow through franchise models in relevant markets.

Moreover, the prospectus reveals that currently, Mixue Bingcheng has only accepted one round of financing, specifically an investment of 2.333 billion yuan from Meituan Longcheng, Shenzhen Yunqi, and Tianjin Panxue in December 2020, with the three institutions backed by Meituan Longzhu, CPE Yuanfeng, and Hillhouse Capital, resulting in a post-investment valuation of 23.333 billion yuan.

Overseas expansion has slowed.

In terms of large-scale expansion, domestically, MIXUE Ice City focuses on the town market. As of September 30, 2024, MIXUE Ice City has a total of 40,510 stores in mainland China, of which approximately 0.023 million are located in third-tier and lower cities, accounting for 57.2% of the total number of stores. The vast development space in the sinking market has become an important driving force for the stable development of MIXUE Ice City.

In addition, going overseas is also an important direction for MIXUE Ice City to expand its scale. Since opening its first overseas store in Hanoi, Vietnam in 2018, as of September 30, 2024, MIXUE Ice City has opened nearly 4,800 stores in 11 countries overseas, covering 11 countries including Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, Laos, Singapore, Australia, South Korea, and Japan. Among them, the number of stores in Indonesia has exceeded 2,667, and the number of stores in Vietnam has also surpassed 1,304. However, its overseas expansion has slowed down in 2024.

According to the prospectus, in 2021, MIXUE Ice City had a total of 270 stores, net adding 1,595 stores to reach 1,795 by 2022; in 2023, it added 2,536 stores to reach 4,331, while by September 30, 2024, it only net added 461 stores to reach 4,792.

Moreover, the revenue contribution from outside mainland China has also declined as a proportion of total revenue. From 2021 to 2023, MIXUE Ice City’s revenue from outside mainland China was 0.05 billion yuan, 0.541 billion yuan, and 1.487 billion yuan, accounting for 0.5%, 4%, and 7.3% of total revenue, respectively.

As of September 30, 2024, the revenue from outside China fell from 1.171 billion yuan in the same period last year to 0.952 billion yuan, while its proportion of total revenue also declined from 7.6% to 5.1%.

However, MIXUE Ice City is strengthening its development capacity in overseas markets through the construction of overseas supply chains. As of September 30, 2024, MIXUE Ice City has established a localized warehousing system in four Southeast Asian countries, including a total of about 0.069 million square meters across seven self-operated warehouses.

Analyst Zhu Danpeng from CHINA FOODS commented to the Star Daily reporter that as MIXUE Ice City continues to expand in overseas markets, the number of its stores has reached a certain scale. Particularly in the Southeast Asian market, MIXUE Ice City already has over 4,000 stores, which has contributed to a certain degree of market saturation. At the same time, other tea drink brands are also actively entering overseas markets, intensifying market competition.

In his view, the supply chain and logistics system in overseas markets are relatively complex, requiring more investment and management. With the increase of store numbers, the challenges of supply chain and logistics are also growing. To ensure product quality and operational efficiency, MIXUE Ice City may need to invest more resources to improve its supply chain and logistics system, which may, to some extent, limit the rapid expansion of its store numbers.