Just over ten days after its debut in the capital market, Mixue Bingcheng was exposed for food safety violations at one of its stores during this year’s March 15 International Consumer Rights Day. However, instead of a public outcry against the brand, online discussions were more centered around its affordability, comparisons to home food preparation habits, and criticism of more severe food safety issues elsewhere. Meanwhile, market enthusiasm remained strong, with Mixue Bingcheng’s stock price continuing to rise, pushing its market value past HKD 150 billion (USD 19.17 billion), making it the most valuable publicly traded restaurant company in China. How should Mixue Bingcheng’s market recognition be understood? How should its recent food safety controversy be evaluated? And what future path will Mixue Bingcheng take?
Recognition by the Capital Market and Soaring Stock Prices
Mixue Bingcheng attracted significant investor attention even during its subscription phase, securing cornerstone investments from M&G Investments, HongShan Growth (Sequoia China), Boyu Capital, Hillhouse, and Meituan Dragon Ball, which collectively accounted for 45.09% of the total subscription amount. The leverage subscription ratio reached 5,181.89 times, with total leveraged subscription funds amounting to HKD 1.79 trillion (USD 229 billion), making it the new “frozen capital king” of Hong Kong stocks.
On March 3, 2025, Mixue Bingcheng (HK: 02097) successfully listed on the main board of the Hong Kong Stock Exchange, priced at HKD 202.5 (USD 25.88) per share. The stock delivered a strong first-day performance, closing up 43.21%, breaking the pattern where most newly listed tea brands in Hong Kong had suffered post-IPO declines. Since then, the stock has continued its bullish trend, closing at HKD 442.2 (USD 56.53) on March 20, 2025, representing a cumulative increase of 118.37% and a total market capitalization of HKD 166.7 billion (USD 21.33 billion), making it one of the most prominent consumer stocks in the market.
Mixue Bingcheng’s success clearly reflects the capital market’s recognition of its business model, which centers on supply chain-driven expansion. By leveraging a strong franchise system and large-scale low-price strategy, the company has successfully replicated its low-tier market strategy in China on a global scale. According to its prospectus, from 2021 to 2023, Mixue Bingcheng generated revenue of CNY 10.351 billion (USD 1.44 billion), CNY 13.576 billion (USD 1.89 billion), and CNY 20.302 billion (USD 2.83 billion), respectively. Over 90% of its revenue comes from supply chain sales to franchisees, including store materials and equipment.
Thanks to its massive procurement scale, Mixue Bingcheng enjoys significant cost advantages. Public data indicates that its wholesale sugar price is 15% lower than the market rate, plastic cups cost 10% less, milk powder costs 10% less, and lemons cost over 20% less. Additionally, 60% of its supply chain is self-built, with five major production bases covering a total area of 790,000 square meters. The company’s self-produced syrup and bottled fruit syrup cost nearly 50% less than externally sourced alternatives (as per data from the first nine months of 2024). Combined with 27 warehouse hubs and a cold-chain delivery system covering 97% of its stores, Mixue Bingcheng has a fresh fruit spoilage rate of only 0.5%, far lower than the industry average of 3%.
The prospectus also reveals that 66% of its IPO proceeds will be used for supply chain expansion, reaffirming that Mixue Bingcheng positions itself primarily as a supply chain enterprise rather than just a tea beverage brand, solidifying its full-chain closed-loop business moat.
The Two Sides of Public Opinion After the March 15 Scandal
On March 15, 2025, Hubei Economic Television’s “3.15 Special Report” exposed food safety issues at Mixue Bingcheng’s Yichang Ningju Xintiandi store, including using overnight pre-sliced fruit stored at room temperature and beverage packaging contaminated with flies and small insects. This immediately attracted public attention, as companies exposed in past March 15 consumer protection investigations have often faced severe backlash, damaging brand reputation and business operations. However, this time, public opinion was relatively forgiving. A widely shared comment online humorously stated, “What do you expect from a CNY 4 (USD 0.56) milk tea? At least it’s better than artificial flavoring.” This highlights how Mixue Bingcheng’s strong affordability and brand mascot (“Snow King”) have anchored deep brand loyalty among consumers.
Unlike previous scandals where exposed companies’ stock prices plummeted, Mixue Bingcheng’s stock rose 2.22% on March 17, closing at HKD 415.0 (USD 53.08), demonstrating investor confidence in its long-term prospects.
In response to the incident, Mixue Bingcheng initially opted for a low-profile crisis management approach, merely stating through a staff member that “sliced fruit cannot be stored overnight”, without addressing how it would handle the affected store, investigate similar violations, or strengthen franchisee management.
Although Mixue Bingcheng has implemented strict franchise management policies, such as requiring franchisees to be full-time operators and spend at least 90 hours per month at their stores, and using an AI-based store inspection system to monitor daily hygiene compliance, this incident revealed regulatory blind spots. The store manager shifted the blame to individual employees, claiming that he could not monitor operations around the clock, while employees allegedly performed violations in surveillance blind spots to evade detection. Reports suggest that Mixue Bingcheng headquarters has around 1,600 inspectors, each responsible for approximately 30 stores, making enforcement challenging given the company’s vast store network. Ensuring strict compliance with headquarters’ standards remains a key management challenge going forward.
Mixue Bingcheng’s Future Growth Strategy
Morgan Stanley’s latest “Global and China Economic and Market Outlook” report suggests that current policies are insufficient to break the low-price consumption cycle, predicting that China’s nominal GDP growth will remain low over the next two years. BCC experts also note that post-pandemic consumer behavior has shifted, with a decline in materialistic spending and a preference for experiences that bring added value or joy, such as dining and travel. While per capita spending may decrease, overall consumer participation is expected to increase, creating expansion opportunities for leading tea beverage brands like Mixue Bingcheng. Additionally, China’s “Consumption Stimulus Action Plan” aims to boost consumer confidence, potentially benefiting the ready-to-drink tea segment as a “happiness-driven consumption” category.
Mixue Bingcheng’s expansion will focus on rural and township markets. Internal projections estimate that China could support 45,000 stores, leaving room for 5,000 additional outlets beyond its current 40,000+ locations. Store distribution data shows that 41% are located near schools, 36% in residential areas, 14% on commercial streets, 7% in industrial parks, and 2% in office buildings. Among these, commercial streets hold the most expansion potential, particularly in township markets where retail activity is concentrated. The brand also plans to open stores in enclosed venues such as hospitals and transportation hubs, as well as increase store density in existing urban markets.
Internationally, Mixue Bingcheng’s growth is most aggressive in Indonesia, where it operates over 3,000 stores, accounting for 65% of its overseas network, with plans to expand to 6,000 locations. Indonesia’s market alone could support 15,000–20,000 outlets, given its population and consumption potential. The average monthly revenue per store in Indonesia is approximately CNY 90,000 (USD 12,200), and with lower rent and labor costs, franchisees can break even within a year.
With IPO funds allocated to international supply chain expansion and localized production in Southeast Asia, Mixue Bingcheng is poised to replicate its domestic success globally, securing its position as the world’s leading affordable tea brand.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.