Connect with us

Hi, what are you looking for?

TheSmartCitizenReport.com

Investing

Analyst reveals largest challenge for Mixue after stellar market debut

Mixue could face challenges in growing its footprint in the tier 1 cities, according to a Zephirin Group analyst.

Longdley Zephirin’s remarks arrive only hours after shares of China’s largest bubble tea chain rallied more than 40% on their Hong Kong debut.

Mixue sold a total of 17.06 million shares in its initial public offering (IPO) and raised HK$3.45 billion ($440 million) on Monday.

Mixue could find it hard to expand to tier 1 cities

Mixue has so far steered clear of high-cost real estate markets to focus entirely on tier 2 and tier 3 cities.

This has enabled it to gain immense popularity among price-sensitive consumers.

The bubble tea company offers products at up to 50% discount to rivals, which Longdley Zephirin dubbed “significant cost savings” for consumers.

However, the company based out of Zhengzhou, Henan will face higher operational costs and increased competition from the likes of “HEYTEA” once it goes after the central business districts (CBDs), he argued in a CNBC interview on Monday.

That said, the Zephirin Group analyst does not expect Mixue to chase tier 1 cities anytime soon, adding “it will maintain its local operations, in tier 2, tier 3 cities, and continue to push volume” for now.

Could Mixue consider expansion into the US or Europe?

Mixue already has a meaningful footprint across Southeast Asia – and is on the lookout currently for new regions to expand its operations and, by extension, its customer base.   

This could include the US as well as parts of Europe, according to Longdley Zephirin, who expects going beyond its current locations to help Mixue compete more fiercely with HEYTEA.

Both regions have large, diverse markets with a high demand for innovative and affordable food and beverage options, which presents a significant opportunity for Mixue to tap into new customer bases.

Plus, the US and European countries are known for strong franchise models that may further help Mixue in terms of brand recognition and global presence via local partnerships and investments.  

Is it already too late to invest in Mixue stock?

Investors should know that China’s Mixue boasts a solid balance sheet at present.

The chain of ice cream and iced tea stores had well over $6.0 billion in cash at the end of its most recent quarter.

In the trailing 12 months, Mixue has generated $23.57 billion in revenue and $4.22 billion in net income attributable to its common shareholders.

Additionally, the Hong Kong listed firm’s debt-to-equity ratio currently sits at 3.64%.

That made cornerstone investors like Meituan’s Long-Z Fund and M&G Investments participate in its more than 5,200 times oversubscribed IPO.

The bookrunners for the Mixue’s initial public offering were UBS, Goldman Sachs, and the Bank of America Securities.

The post Analyst reveals largest challenge for Mixue after stellar market debut appeared first on Invezz

Enter Your Information Below To Receive Latest News, And Articles.







    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    BREAKING NEWS

    Israeli authorities said four Israeli Defense Forces (IDF) soldiers were killed and nearly 60 people were wounded in a drone strike on a military...

    BREAKING NEWS

    Rescue services in Israel said over 60 people were wounded, some of them critically, in a drone strike in Binyamina, Israel, which the Lebanon-based...

    BREAKING NEWS

    Former President Trump ripped President Biden for going weeks without speaking with Israeli Prime Minister Benjamin Netanyahu as war continues raging in the nation,...

    BREAKING NEWS

    JOHANNESBURG – In what is described by some as electioneering and a last-minute attempt to leave a legacy, some observers say President Biden and...

    BREAKING NEWS

    Vice President Kamala Harris and former President Donald Trump are locked in an extremely tight contest for the White House, with voters virtually split...

    BREAKING NEWS

    Voters in storm-ravaged parts of the Southeast could face new hurdles at the ballot box this year following the destruction wrought by Hurricanes Helene...

    BREAKING NEWS

    Former National Institutes of Health employee Margaret Moore, accused by Republicans of helping others shield emails from the public, invoked her Fifth Amendment right...

    BREAKING NEWS

    A ‘painful’Israeli response weighs over the heads of the Iranian regime after their ballistic missile attacks on Tel Aviv on Tuesday.  President Joe Biden has...

    Disclaimer: TheSmartCitizenReport.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.

    The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.