(Yicai) Feb. 26 -- Chinese ice cream and tea chain Mixue Ice Cream & Tea’s initial public offering on the Hong Kong stock exchange, which wrapped up today, was oversubscribed by more than 5,125 times, with margin loans taken out by retail investors reaching HKD1.77 trillion (USD227.7 billion), setting a new record for the Hong Kong stock market, Securities Times reported.

Apart from being leader of the pack in China’s crowded modern tea sector, Mixue’s shares were in such high demand thanks to Hong Kong’s new IPO system, called FINI, rolled out in November 2023. This shortens the waiting time between applying for shares and the listing, and after the subscription amount reaches a certain level, investors only need to pay part of the amount due. Previously, an investor’s funds were tied for up to two weeks, and if the funds were borrowed, the investor had to pay interest regardless of whether the bid was successful or not.

As a result, many Hong Kong brokers are offering zero-interest new share subscriptions. For regular companies going public, brokerages can offer leverage of up to 10 times the amount paid and for sought-after companies, this can go up as high as 20 times. In the case of Mixue, a number of securities firms were offering leverage of 100 times or more.

Futu Securities was the brokerage which subscribed for the most Mixue shares at HKD1.06 trillion (USD136.4 billion), accounting for 59 percent of the total. It was followed by Philip Securities, with a subscription amount of HKD306 billion (USD39.3 billion), or 17 percent. Other brokers such as Prudential Securities and Tiger Brokers also subscribed for more than HKD100 billion (USD12.8 billion) each.

Mixue was the largest ready-made beverage company in the world as of Dec. 31, with 46,479 stores across 11 countries. By comparison, Starbucks has about 38,000 outlets and McDonald's around 42,000. In the first three quarters last year, Mixue posted net profit of CNY3.5 billion (USD482.2 million), well ahead of competitors such as Naixue, Dreamiya and Guming.

Mixue plans to issue 17.06 million new shares in Hong Kong, under the stock ticker 2097, amounting to 4.52 percent of its total shares, the Zhengzhou-based company said earlier. The issue price was set at HKD202.50 (USD26), with a total fundraising target of HKD3.4 billion (USD445.2 million), which would give the beverage maker a market valuation of about HKD76.3 billion (USD9.8 billion) after the offering.

Around 66 percent of the proceeds will be used to expand Mixue’s global footprint, it said. Twelve percent will go toward building its brand and intellectual property and another 12 percent will strengthen digital and smart capabilities across the business. The rest will be used to supplement working capital and other general business purposes.

Editor: Kim Taylor