Iced cold bubble tea on a hot summer day.
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Shares of Chinese bubble tea chain Chabaidao fell nearly 40% in their debut trading on the Hong Kong Stock Exchange.
The stock, officially listed as Sichuan Baicha Baidao Industrial, fell to a low of HK$10.84 in the late morning — about 38% below its initial public offering price of HK$17.50.
The bubble tea company's IPO was the largest Hong Kong listing in 2024 so far, with the company receiving net proceeds of HK$2.59 billion from the IPO, before including expenses, according to a prospectus filed with the Hong Kong Stock Exchange.
The company said it ranked third in China's fresh coffee shop market in terms of retail sales value in 2023, with a market share of 6.8%.
Chabaidao offered 90% of its 147.7 million shares in a global offering, while the remaining 10% was offered in a public offering in Hong Kong.
However, the public offering was only 0.5 times subscribed, prompting the company to reallocate the remaining shares to the global offering, which was subscribed 1.11 times.
Chabaidao revealed in the prospectus that revenues for the fiscal year ending in 2023 amounted to 5.7 billion yuan ($786.8 million) and total profit reached 1.96 billion yuan in the same period.
It added that from 2021 to 2023, the compound annual growth rate of its net profits reached 21.6%.
