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CHABAIDAO (02555), once regarded as the "second new-style tea drink stock," is now facing its most severe crisis since going public. On October 13, 2026, an order from the Hong Kong Securities and Futures Commission suspended trading in CHABAIDAO shares starting at 9:00 AM that day. The reason for the suspension points directly to the possibility that its IPO may have been artificially manipulated, with the intent to create an untrue appearance of demand for its shares. On the last trading day before the suspension, CHABAIDAO closed at HK$4.035, a cumulative decline of approximately 76.9% from its IPO price of HK$17.5, leaving a market capitalization of only HK$5.962 billion. (Source: Wind Information)
From a "capital outcast" that broke its IPO price on the very first day of listing to a "problem company" suspended by regulators on suspicion of fraudulent issuance, CHABAIDAO has completed in just a year and a half the kind of dramatic trajectory that many companies may not experience in a decade. Behind this trajectory lies not only the cloud of possible "false demand" at the IPO stage, but also a systematic weakening of its operating fundamentals. Looking at the performance data, the company has undergone a typical "face change upon listing": in 2024, both revenue and net profit attributable to shareholders fell sharply; although 2025 saw a rebound on a low base, the profit scale remains far below the 2023 level. Even more alarming is that franchisees are accelerating their exit, same-store sales continue to weaken, store expansion has nearly stalled, and the revenue structure's reliance on one-time equipment sales to franchisees has increased, while recurring operating revenue is shrinking.
CHABAIDAO IPO Manipulation Cloud: Creating False Subscription Demand, IPO Proceeds Flowing Back to Placees? CICC's "Gatekeeper" Responsibility Questioned
The SFC investigation points to a core allegation: CHABAIDAO's initial public offering may have been artificially manipulated to create a false or untrue appearance of demand for its shares. This means that the subscription data that initially appeared to show "reasonably enthusiastic institutional interest" may not have reflected genuine market will. Looking back at the April 2024 placement results, red flags had already emerged. CHABAIDAO's public offering was only 0.5 times subscribed, with a 100% allotment rate for retail investors, indicating extremely low market participation. Although the international placement recorded 1.11 times "slight oversubscription," the placees were highly concentrated: the top five placees accounted for 52.11%, and the top ten accounted for 86.75%. This placement structure of "frozen retail demand, reluctant institutions, and high concentration" itself creates tension with the narrative of "robust market demand."
The operational methods disclosed by the SFC further reveal a possible closed-loop logic: some IPO proceeds may have been secretly transferred out of the listed company in accordance with undisclosed agreements between the listed company and suspicious groups, and used to invest in financial products, thereby achieving a flow-back of the raised funds. In short, the shares that appeared to be "sold" on the surface may have been backed by funds from carefully arranged related parties rather than genuine independent investors.
On the first day of listing, the stock suffered a sharp decline of 27%. The company issued shares at HK$17.5 per share, but the opening price was only HK$15.74, reflecting a relatively cold market response. Subsequently, the stock performed weakly, and the company's market capitalization shrank from over HK$20 billion at the time of listing to less than HK$6 billion currently, a cumulative decline of more than 70%. Before the trading suspension, CHABAIDAO's stock closed at HK$4.035 per share.
In this turmoil, CICC (601995), as the sole sponsor and sole overall coordinator of CHABAIDAO's IPO, has drawn considerable attention for its role. In Hong Kong IPOs, sponsors bear the statutory duty of "gatekeeper," requiring them to conduct due diligence on the authenticity of the prospectus and to look through the actual control relationships and sources of funds of placees during the placement process. When the public offering is undersubscribed and the international placement is highly concentrated among a small number of placees, the sponsor should have been obligated to identify and question the anomalous signals. If the investigation ultimately confirms that CICC had deficiencies in performing its duties — such as in screening placees and confirming the transparency of subscription funds — its "gatekeeper" status will face severe scrutiny.
SFC Chief Executive Officer Liang Fengyi stated that the commission has a zero-tolerance policy toward any form of IPO manipulation, price manipulation, or creation of a false market. The investigation is still ongoing, and CHABAIDAO shares will remain suspended from trading.
CHABAIDAO's Growth Weakens, Performance Decline Emerges: Store Expansion Stalls, Annual Franchisee Attrition Rate Reaches 17%
Before listing, CHABAIDAO still maintained double growth in its annual performance. From 2021 to 2023, CHABAIDAO achieved revenue of RMB 3.644 billion, RMB 4.232 billion, and RMB 5.704 billion, respectively, representing year-on-year growth of 237.40%, 16.12%, and 34.80%; net profit attributable to shareholders was RMB 756 million, RMB 954 million, and RMB 1.139 billion, respectively, representing year-on-year growth of 276.82%, 26.26%, and 19.37%. From the 2021-2023 performance overview, we can see that although CHABAIDAO's performance growth rate declined significantly compared with 2021, it still maintained double growth in both revenue and net profit attributable to shareholders.
However, CHABAIDAO's relatively strong financial condition of dual growth came to an abrupt halt after listing. In 2024, the year of listing, revenue fell 13.8% year-on-year to RMB 4.918 billion, and net profit attributable to shareholders plunged 58.6% to RMB 472 million, nearly halving from RMB 1.139 billion in 2023. Although net profit attributable to shareholders rebounded to RMB 805 million in 2025, with growth of 70.5%, this high growth was mainly due to the low base effect from 2024, and its absolute profit level remains significantly below the RMB 1.139 billion in 2023, while revenue only recovered to a level close to 2023. In other words, the "high growth" in 2025 is more of a restorative rebound rather than a return to the pre-listing growth trajectory.
In the full year of 2025, 1,218 franchisees terminated cooperation with CHABAIDAO, representing an attrition rate of 17.06%, further higher than the same period last year. Even more alarming is that the vast majority of these departing franchisees exited voluntarily rather than being actively removed by the company. In the first half of 2026, another 497 franchisees terminated cooperation, of which only 12 were actively terminated by the company. (Source: Company announcements)
The comings and goings of franchisees are a direct vote on single-store profitability. Calculations by Huatai Securities (601688) show that the annualized revenue from product sales per franchised store is approximately RMB 519,000, down 5.5% year-on-year. At the same time, store expansion continues to decline sharply. Net store additions once reached as high as 2,837 in 2021, and remained at 1,284 to 1,440 in 2022 and 2023. But in 2024, the year of listing, net additions plunged to 594, directly halving from the previous three years; in 2025, it further shrank to only 226, and compared with the 2021 peak, the scale of net additions has shrunk by more than 90%. From an average annual net increase of thousands of stores to only a net increase of just over two hundred stores for the full year, CHABAIDAO's store expansion slowdown is no longer merely a deceleration in growth — it is approaching stagnation.
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