The Hong Kong Stock Exchange is not celebrating its revival with champagne, but with much larger, more gelatinous bubbles. Those of China's leading bubble tea chain Mixue. Its IPO on Monday, March 3, exceeded all expectations. The share price rose by 38% and the company managed to raise over €400 million. It was the largest local IPO since 2021.
The phenomenon is all the more surprising given that, against a backdrop of weak domestic consumption, investors have handed a triumph to a tea seller based in China's small towns, the hardest hit by the economic slump. But the bubble tea craze shows that some recipes can be seductive. The recipe for this drink, which is taking Paris by storm, was invented in Taiwan in the 1980s. It mixes tea, milk and tapioca or fruit pearls. According to Bloomberg, this market could reach €70 billion in China by 2027. Mixue, founded in 1997, has 45,000 franchise stores across the country, four times as many as in 2020.
Its low prices are the key to its success. Its teas and ice creams sell for between €0.40 and less than €1. Mixue is already present in 11 countries. China exports not only steel, car and social media, but Starbucks competitors too. The company's founder, Zhang Hongchao, and his brother now have assets valued at over €8 billion.
But there are other, far more damaging bubbles out there: stock market bubbles. The Hong Kong craze has a lot to do with the arrival of investors from mainland China, hitherto little present in the special administrative region. They now own 12% of Hong Kong shares, where they find cheaper valuations than at home. The worldwide success of DeepSeek's artificial intelligence, also listed in Hong Kong, has also driven market enthusiasm. The real test will come with the listing of CATL, the battery giant, which plans to raise €5 billion. The stakes and potential bubbles will no longer be made of tapioca.
Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.