Apr 23 2024: ichuan Baicha Baidao, a popular Chinese bubble tea chain known as Chabaidao, experienced a significant drop in its stock price on its first day of trading on the Hong Kong Stock Exchange.
The company’s shares fell by nearly 40% during its trading debut and closed the session 26.8% below its initial public offering (IPO) price.
Chabaidao’s public listing marked the largest IPO in Hong Kong this year, but its lackluster performance highlights the challenges that companies face when listing in the city.
Despite raising approximately $330 million in its IPO, investor interest was subdued. The company intends to utilize half of the funds raised to enhance its operations and strengthen its supply chain.
In 2023, Chabaidao ranked third in China’s market for freshly made tea shops, capturing a market share of 6.8% based on retail sales value.
The IPO allocated 90% of its 147.7 million shares globally, with the remaining 10% offered publicly in Hong Kong. However, due to low subscription rates (0.5 times subscribed for the public offer), Chabaidao redistributed the remaining shares to the global offer, which saw a subscription rate of 1.11 times.
