Latest news with #SnowKing
Yahoo
22-03-2025
- Business
- Yahoo
Hong Kong's SFC orders brokers to end 'imprudent' margin financing to pre-empt IPO madness
Hong Kong's market watchdog has asked the city's stock brokerages to clean up their act in funding their clients in initial public offerings (IPOs), after a review discovered "imprudent and aggressive financing practices" that exposed both parties to financial risks or default. They would be required to collect an upfront subscription deposit of 10 per cent from clients who do not fully pre-fund their IPO orders, the Securities and Futures Commission (SFC) said in a circular on Thursday. The firms must also assess their financial capabilities and creditworthiness, as well as segregate those deposits to smoothen refunds for unsuccessful bids, it added. The decision followed a review of margin financing practices by some undisclosed brokerages, triggered by excessive oversubscription rates in stock offerings by companies including Mixue Group and Blok Group that could create an illusion of "hot" IPOs, officials said. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Mixue's mascot Snow King strikes a gong during the company's listing ceremony on March 3. Photo: Reuter alt=Mixue's mascot Snow King strikes a gong during the company's listing ceremony on March 3. Photo: Reuter> Retail investors in Hong Kong borrowed more than HK$1.8 trillion (US$231.6 billion) from brokerages to bid for China's largest fresh-drinks chain Mixue, resulting in 5,258 times the number of shares on offer. They also took HK$474 billion in margin financing to bid for shares of toymaker Blok Group, or about 6,000 times the number of shares on offer. "Some of the imprudent and aggressive financing practices exposed themselves and their clients to undue financial risks, including the risk of default when the number of shares allotted to clients exceeds their financial capabilities," the SFC said. Other "deficiencies" included accepting clients' orders before ensuring they had sufficient resources to meet their obligations, it added. The caution reflects the unease among market regulators. The SFC issued a similar circular in November 2023, urging financial institutions to prudently manage their risks when providing IPO financing and subscription services following the introduction of the Fast Interface for New Issuance (FINI) platform. The platform allows brokers to prepay for only the maximum number of shares that can be allotted in a public offering, instead of locking in funds for the entire excess amount. Some brokers offered zero-interest margin financing loans to attract customers. In the Thursday circular, the SFC reminded its licensed corporations to take reasonable control measures to prevent a client from submitting multiple IPO orders and ensure the accuracy of client identification data. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
South China Morning Post
21-03-2025
- Business
- South China Morning Post
Hong Kong's SFC tells brokers to end ‘imprudent, aggressive' IPO financing practices
Hong Kong's market watchdog has asked the city's stock brokerages to clean up their act in funding their clients in initial public offerings (IPOs), after a review discovered 'imprudent and aggressive financing practices' that exposed both parties to financial risks or default. Advertisement They would be required to collect an upfront subscription deposit of 10 per cent from clients who do not fully pre-fund their IPO orders, the Securities and Futures Commission (SFC) said in a circular on Thursday. The firms must also assess their financial capabilities and creditworthiness, as well as segregate those deposits to smoothen refunds for unsuccessful bids, it added. The decision followed a review of margin financing practices by some undisclosed brokerages, triggered by excessive oversubscription rates in stock offerings by companies including Mixue Group and Blok Group that could create an illusion of 'hot' IPOs , officials said. Mixue's mascot Snow King strikes a gong during the company's listing ceremony on March 3. Photo: Reuter Retail investors in Hong Kong borrowed more than HK$1.8 trillion (US$231.6 billion) from brokerages to bid for China's largest fresh-drinks chain Mixue, resulting in 5,258 times the number of shares on offer. They also took HK$474 billion in margin financing to bid for shares of toymaker Blok Group, or about 6,000 times the number of shares on offer. 'Some of the imprudent and aggressive financing practices exposed themselves and their clients to undue financial risks, including the risk of default when the number of shares allotted to clients exceeds their financial capabilities,' the SFC said. Other 'deficiencies' included accepting clients' orders before ensuring they had sufficient resources to meet their obligations, it added. The caution reflects the unease among market regulators. The SFC issued a similar circular in November 2023, urging financial institutions to prudently manage their risks when providing IPO financing and subscription services following the introduction of the Fast Interface for New Issuance (FINI) platform. Advertisement The platform allows brokers to prepay for only the maximum number of shares that can be allotted in a public offering, instead of locking in funds for the entire excess amount. Some brokers offered zero-interest margin financing loans to attract customers.
BBC News
03-03-2025
- Business
- BBC News
Bubble tea chain bigger than Starbucks sees shares jump on debut
Mixue Ice Cream and Tea may be unfamiliar to many of us but the Chinese firm has more outlets than McDonald's and Starbucks. On Monday, the bubble tea chain's shares jumped by more than 40% in their Hong Kong Stock Exchange debut. The company raised $444m (£352m) in the financial hub's biggest initial public offering (IPO) of the year. Mixue's popularity comes as many people in China are grappling with the country's economic challenges - including a property crisis, and weak consumer and business confidence. It sells ice creams and drinks for an average of six Chinese yuan ($0.82; £0.65). The company was founded in 1997 by Zhang Hongchao, a student at Henan University of Finance and Economics, as a part time job to help his family's finances. Its full name Mìxuě Bīngchéng means "honey snow ice city", with its stores adorned with its Snow King mascot and playing the firm's official theme tune on a loop. According to Mixue, it has more than 45,000 stores across China and 11 other countries, including Singapore and Thailand. The firm has also said it plans to continue expanding. That compares to "over 43,000 locations" for McDonald's and Starbucks' 40,576 outlets. While it is often seen as China's biggest bubble tea, iced drinks, and ice cream chain, it operates more like a raw-materials supplier than a traditional brand. Unlike Starbucks, which operates more than half of its stores directly, almost all of Mixue's outlets are run by franchisees. Mixue's strong market debut contrasts with smaller rival Guming, which saw shares slide on its first day of trading in February. Last year, shares in the owner of bubble tea chain Chabaidao also fell on their market debut. Is China's bubble tea bubble about to burst? Three reasons Trump tariffs aren't China's only problem Fast food International Business China
BBC News
03-03-2025
- Business
- BBC News
Mixue: The world's biggest fast food firm that you've never heard of
Mixue Ice Cream and Tea may be unfamiliar to many of us but the Chinese firm has more outlets than McDonald's and Monday, the bubble tea chain's shares jumped by nearly 30% as they started trading on the Hong Kong Stock company raised $444m (£352m) in the financial hub's biggest initial public offering (IPO) of the popularity comes as many people in China are grappling with the country's economic challenges - including a property crisis, and weak consumer and business confidence. It sells ice creams and drinks for an average of six Chinese yuan ($0.82; £0.65). The company was founded in 1997 by Zhang Hongchao, a student at Henan University of Finance and Economics, as a part time job to help his family's full name Mìxuě Bīngchéng means "honey snow ice city", with its stores adorned with its Snow King mascot and playing the firm's official theme tune on a to Mixue, it has more than 45,000 stores across China and 11 other countries, including Singapore and Thailand. The firm has also said it plans to continue compares to "over 43,000 locations" for McDonald's and Starbucks' 40,576 it is often seen as China's biggest bubble tea, iced drinks, and ice cream chain, it operates more like a raw-materials supplier than a traditional Starbucks, which operates more than half of its stores directly, almost all of Mixue's outlets are run by strong market debut contrasts with its smaller rival Guming, which saw its share slide on its first day of trading in year, shares in the owner of bubble tea chain Chabaidao also fell on their market debut.
Yahoo
22-02-2025
- Business
- Yahoo
Mixue aims to raise US$444 million in Hong Kong IPO as its juices, iced drinks take off
China's largest fresh-drink company Mixue Group aims to raise HK$3.45 billion (US$444 million) in a Hong Kong initial public offering (IPO) to expand its business amid heightened competition. The company plans to sell 17.1 million shares at HK$202.50 each, according to a filing with the Hong Kong stock exchange on Friday. The stock is expected to begin trading on March 3. Mixue has more than 45,000 stores in mainland China and 11 overseas markets in Southeast Asia, Australia, Japan and South Korea. It is known for its value-for-money freshly made fruit and tea drinks, ice cream and coffee, selling for about US$1, the company said. Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. Founder and chairman Zhang Hongchao began the business in 1997 in Zhengzhou, the capital of inland province Henan, with a home-made shaved ice machine. In 2018, the firm introduced Snow King as its company logo and brand ambassador. Mixue planned to use the IPO proceeds for production facilities, enhancing its brand and marketing, working capital and general corporate purposes, the filing said. The company's profit surged 45.2 per cent year on year to 3.5 billion yuan (US$483 million) in the first nine months of last year. It sold around 7.1 billion drinks during the period. The IPO attracted five cornerstone investors, which subscribed to shares worth US$200 million: British asset manager M&G Investments, HongShan Capital's growth fund, a unit of Boyu Capital, Hillhouse Group's fund and Meituan's Long-Z Fund. The share offering follows peers Guming Holdings' HK$1.81 billion listing earlier this month and Sichuan Baicha Baidao's HK$2.6 billion IPO in April. A Mixue shop in Mong Kok. The company opened its first store in Hong Kong in December 2023. Photo : RedNote alt=A Mixue shop in Mong Kok. The company opened its first store in Hong Kong in December 2023. Photo : RedNote> Mixue's supply-chain advantages and economies of scale put it ahead of peers and should translate to a higher valuation, analyst Xinyao Criss Wang said in a note published on investment intelligence platform Smartkarma. "But Mixue may have reached the growth ceiling in the China market based on its current expansion speed," he added. Guming's shares finished their first day of trading 6.4 per cent below the IPO price, while Sichuan Baicha Baidao slumped 27 per cent in its debut. Listing approvals for Mixue and Guming had been delayed in 2024 as Chinese regulators worried about the sector's prospects amid slumping share prices, with both firms' listing applications lapsing after six months. Mixue's revived its application and received the green light on January 7. Bank of America Securities, Goldman Sachs and UBS are the joint sponsors of the Mixue IPO. This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved. Sign in to access your portfolio
