What’s new: The Chinese bubble tea chain ChaBaiDao has passed a review by the Hong Kong stock exchange regulator for its initial public offering and will become the second tea shop to debut in the city.
Chengdu-based ChaBaiDao, owned by Sichuan Baicha Baidao Industrial Co. Ltd., counts Orchid Asia, Loyal Valley Capital, New Hope Group and China International Capital Co. Ltd. as investors. Since its establishment in 2008, the company has completed two funding rounds with a valuation at around 17.5 billion yuan ($2.4 billion).
ChaBaiDao operates 7,927 outlets selling fruit tea and milk tea across China. Total store sales reached 16.9 billion yuan in 2023, according to its prospectus. It ranked third in the country’s bubble tea market in terms of sales, with a market share of 6.8%. The company’s net profit has grown at a compound annual rate of 21.6% since 2021 to reach 1.1 billion yuan in 2023.
The context: ChaBaidao joins a wave of Chinese bubble tea chains rushing to list in Hong Kong following the debut of Nayuki in June 2021. They include the operators of Mixue Bingcheng, China’s largest bubble tea franchise, Zhejiang-based GoodMe and Auntea Jenny (Shanghai) Industrial Co. Ltd.
Since 2023, tighter listing rules have made it more difficult for chain consumer companies to list on the Chinese mainland, several brokerages and private equity investors previously told Caixin. Listing policy favors letting technology companies with greater capital needs go public, one broker said.
ChaBaiDao first filed for a Hong Kong listing in August 2023 but the application stalled. In February, the company renewed its IPO effort.
China’s freshly made tea beverage market grew from 87.3 billion yuan in 2017 to 213.7 billion yuan in 2022 and is expected to further increase to 511.8 billion yuan in 2027, Auntea Jenny said in the prospectus, citing research by China Insights Consultancy.
Contact reporter Han Wei (weihan@caixin.com)
