Chinese Bubble Tea Maker Slides on Hong Kong's Largest Listing This Year

Dow Jones04-23

By Jiahui Huang

Shares of Chinese bubble tea maker Sichuan Baicha Baidao Industrial slumped in their trading debut in Hong Kong as investors balked at the financial hub's biggest listing so far this year.

Shares of the Chinese tea chain were down as much as 38% on Tuesday and were last 32% lower at 11.90 Hong Kong dollars.

Baicha Baidao had priced shares at HK$17.50 each in its initial public offering and drawn lukewarm demand. Retail investors subscribed to half shares offered to them, while institutional investors were just 1.1 times oversubscribed in their allocation.

The Sichuan-based company raised HK$2.46 billion (US$313.9 million) in the offering to develop automation and intelligence tools for warehousing and delivery, to support its supply chain in overseas markets, and to develop a coffee shop network in China, among other undertakings.

Baicha Baidao has more than 8,000 stores across China. It is the country's third largest freshly made tea company, with a market share of 6.8%, it said in its prospectus, citing market research firm Frost & Sullivan.

It booked net profit 1.14 billion yuan (US$157.4 million) in 2023, up 19%, on sales of CNY5.70 billion, the prospectus showed.

The trading debut, ahead of planned listings by tea rivals Mixue Ice Cream & Tea and Guming, comes in what has been an extended weak period for new offerings in Hong Kong.

The Hong Kong Exchange saw 73 listings in 2023 that raised HK$46.3 billion, a 56% decline from 2022.

CICC and Citi were among advisers on Baicha Baidao's IPO.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

April 23, 2024 01:30 ET (05:30 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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Retail investors subscribed to half shares offered to them, while institutional investors were just 1.1 times oversubscribed in their allocation. \n</p>\n<p>\n  The Sichuan-based company raised HK$2.46 billion (US$313.9 million) in the offering to develop automation and intelligence tools for warehousing and delivery, to support its supply chain in overseas markets, and to develop a coffee shop network in China, among other undertakings. \n</p>\n<p>\n   Baicha Baidao has more than 8,000 stores across China. 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