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Chinese bubble tea company Chabaidao’s shares fell about 40% in its Hong Kong launch

  • Chabaidao, a Chinese bubble tea chain, had its shares fall nearly 40% on its Hong Kong stock exchange debut

By Ken Ibenne

At its IPO price of HK$17.50, the stock, formally listed as Sichuan Baicha Baidao Industrial, dropped as low as 10.84 Hong Kong dollars in the late morning, or around 38% less.

According to its prospectus submitted to the Hong Kong exchange, the bubble tea company’s IPO was the biggest offering in Hong Kong in 2024 to date, bringing in net proceeds of HK$2.59 billion before listing expenses.

According to the corporation, in terms of retail sales value, it came in third place in China’s freshly prepared tea store market in 2023, holding a 6.8% market share.

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The remaining 10% of Chabaidao’s 147.7 million shares were made available through a public offering in Hong Kong, with the remaining 90% offered in a global offering.

The company decided to reallocate the remaining shares to the worldwide offer, which was 1.11 times subscribed, as a result of the public offer only being 0.5 times subscribed.

According to Chabaidao’s prospectus, the company’s revenue for the fiscal year that concluded in 2023 was 5.7 billion yuan ($786.8 million), while its gross profit for the same period was 1.96 billion yuan.

The net profit’s compound annual growth rate increased to 21.6% between 2021 and 2023, the company reported.

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