Two of China's most popular bubble tea brands are preparing to go public.
Mixue Group and Guming Holdings — known for unique, crowd-drawing flavored teas like passionfruit pulp or grape and cheese — have applied for initial public offerings in Hong Kong, according to Tuesday stock exchange filings.
The size of the offerings was redacted in each company's filing. But on Wednesday, Reuters reported that Mixue, which bills itself as China's largest bubble tea chain, is hoping to raise $500 million to $1 billion, while Guming is aiming to raise $300 million to $500 million, citing an unidentified source.
Mixue declined to comment, while Guming did not immediately respond to a request for comment.
Even though China is grappling with high economic uncertainty and low consumer confidence, affordable treats, such as going to the movies or cheap food and beverages, are seen as bright spots.
The country's bubble tea market is sizable. In 2023, the industry was estimated to be worth 145 billion yuan ($20.4 billion), according to a report by the China Chain Store and Franchise Association, an industry group.
Mixue, which the company says means "sweet snow like honey" in English, has more than 36,000 stores across mainland China and 11 overseas markets, such as Vietnam and Malaysia, according to its prospectus.
The chain, associated with its cheerful snowman logo, sells many items for as little as $1. Its best-sellers include ice cream cones, lemonade and bubble tea, which is also called boba.
The promise of low prices has served as a convincing sales hook. At a Mixue stand in Hong Kong on Thursday, several customers waiting in a long line told CNN that Mixue's prices were too good to pass up.
Emma So, a 30-year-old administrative worker, said she had previously found its drinks a little too sweet. "But it's so cheap," she said while picking up a regular bubble tea with extra tapioca pearls.
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— From CNN's Michelle Toh and Hassan Tayir