This is an English adaptation of a FoodBud historical article originally published on October 26, 2022.
FoodBud introduced this analysis as a recommended piece by Zhang Gouzi, alongside a brief note that Mixue Bingcheng's raw materials had arrived in Malaysia and that store openings there might accelerate. FoodBud also noted that, among Malaysian contacts it asked, Tealive was still viewed as the best-known tea chain, while Chagee had some awareness and was seen as relatively healthier.
The core question in Zhang Gouzi's analysis was why Mixue Bingcheng was a strong candidate for capital-market listing, and why the timing made sense after the company had disclosed its IPO prospectus roughly one month earlier.
The article frames consumer-company listings around two questions:
Its conclusion: a suitable consumer company should have both scale and growth, should be pursuing objectives beyond simply raising money, and should list at a point when it can show a clear No. 1 or No. 2 industry position while still leaving room for market imagination.
The analysis argues that capital markets tend to reward two things: growth rate and scale.
For growth, it cites Qiaqia Food. On August 19, 2022, Qiaqia disclosed its half-year report; because revenue and net-profit growth both fell short of expectations, its share price approached the daily limit-down that day and remained weak afterward. The article notes that investors later discussed reasons such as weak growth in the nut business, raw-material cost pressure, and pandemic-era consumer sentiment, but the market reaction centered on growth missing expectations.
For scale, it compares two listed companies in the Chinese braised-snack sector: Juewei and Huangshanghuang. Looking at 2021 valuation multiples such as PE, PB, PS, and PCF, the article says the market gave Juewei a much higher level of recognition than Huangshanghuang. It attributes that partly to Juewei's larger store base, above 14,000 stores, versus Huangshanghuang's 4,000-plus stores, as well as profitability, management capability, and growth expectations.
Against that framework, Mixue fit the preferred capital-market profile: it had faster growth than peers and a much larger store network than the next player, with the article citing Guming at 6,600-plus stores.
The article argues that Mixue was no longer only pursuing capital for capital's sake. It had already reached around 20,000 stores and was pushing its own limits.
It identifies two additional growth engines:
The article says Mixue was moving from a 20,000-store base toward a 100,000-store ambition.
To show the scale of that ambition, it compares Mixue with global chains:
The article argues that Mixue was visibly narrowing the gap with these global leaders. This, it says, helped explain why the market was willing to discuss a valuation of around RMB 60 billion, and potentially higher expectations.
It contrasts Mixue with Nayuki. In the freshly made tea-drink sector, the article says that without scale and growth advantages, the market response after listing can be a falling market value and weak liquidity.
The article argues that the best listing window is not only about whether the company is strong, but whether the sector's structure has become clear.
It says the freshly made tea-drink market had already passed its strongest beta-growth phase. The market grew from RMB 29.1 billion in 2016 to RMB 279.6 billion in 2021, a 9.6x increase. Over the same period, China's GDP grew 1.5x. The article notes that an industry growing at 1.5 to 2 times GDP growth is usually considered strong; freshly made tea grew at 6.4 times GDP growth, which it describes as unusually rapid.
After that surge, the article says the category had entered a slowdown. Leading tea-drink players had already captured the largest benefits from the cycle, and store-opening speeds had slowed to different degrees.
The article argues that China's freshly made tea-drink market had largely formed its national competitive structure, leaving less room for disruptive new entrants and more room for local reshuffling.
It looks at this from two angles.
At the macro level, it compares tea drinks with the more mature braised-snack sector, where CR5 was around 20%. Freshly made tea had already reached around 13% CR5, suggesting that brand concentration and consumer education were already relatively high, with limited remaining room for further consolidation.
At the micro level, it argues that the supply infrastructure for meeting demand was mature. In location types such as communities, offices, shopping centers, and transport hubs, scaled tea-drink brands were already present. The article says it had become difficult to find these commercial zones without milk-tea shops, and the visible brands were often the same few names.
The article also cites Mixue's prospectus as listing major freshly made tea competitors, while noting that other sizeable players such as Jidong Shaoxiancao, Bingliwang, Chagee, Qifentian, and Guiyuanpu were not included in that cited set.
The article cites Harvard psychological and social empirical research as saying consumers can remember at most seven brands in a product category. It also references Jack Trout, author of Positioning: The Battle for Your Mind, as arguing that consumers remember even fewer, at most two.
The implication is that consumer memory can support only a limited number of brands. Whether the number is seven or two, the article argues that the existing number of freshly made tea-drink brands far exceeded what consumers needed, especially among relatively similar brands.
In this reading, the category had moved from fast growth into a more mature stage with limited remaining expansion space. Once disruptive new variables were less likely, the remaining changes would be structural.
The article says Mixue's move toward capital markets at that point sent two messages:
The article acknowledges that the capital market was under heavy pressure from the US dollar interest-rate hike cycle and that valuation systems were facing unusual stress. Still, it argues that market sentiment would not remain permanently pessimistic, and that valuations would eventually repair if sentiment reversed.
Its conclusion: by choosing this timing, Mixue was using a confident listing posture to declare its dominant position in freshly made tea drinks and set the tone for the sector's next stage. The broader category cycle had passed its midpoint, and the capitalization process for freshly made tea drinks was nearing its end.
Note: IPO, valuation, store-count target, overseas-growth, and market-timing figures above are historical statements from the October 26, 2022 source article.