Chinese tea shop giant Sichuan Baicha Baidao aims to raise US$330 million in Hong Kong’s biggest IPO of 2024

The Chengdu-based company is offering 147.7 million shares at HK$17.50 each, for expected proceeds of HK$2.5 billion, after deducting underwriting commissions, fees and estimated expenses, assuming no overallotment option is exercised.

Baicha Baidao operates ChaPanda stores, a popular bubble tea chain that has a particularly strong presence in the southern provinces of China. The shops sell a range of fruit tea drinks primarily targeted at younger customers.

02:24

Bubble tea shop shut down after staff was ‘too late’ in asking for customer’s health code

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Gu Jilin, the head of investment and financing at Baicha, said at a media briefing that the “timing” was right to list, adding that “even amid weaker market conditions, we will continue to attract international investors.”

Funds raised will go towards domestic expansion plans in China, including branding and promotional activities. The company, founded in 2008, said it had 500 stores by 2019 which had shot up to over 8,000 by 2023.

Wang Hongxue, co-founder and executive director, said the company plans to expand into the boutique coffee industry.

Baicha Baidao has already trialled a store in Chengdu, and while the coffee market is fiercely competitive, it is actively exploring this area. Wang said while there are no plans to launch a coffee franchise, the company will “explore the market” and enter it in a “stable manner.”

Baicha Baidao’s revenue increased 34.8 per cent from 4.2 billion yuan in 2022 to 5.7 billion yuan last year.

Mixue, which has roughly 36,000 stores, is looking to raise US$500 million to US$1 billion in its Hong Kong IPO, while Guming, with 9,000 shops, is aiming to raise US$300 million to US$500 million, according to sources with direct knowledge of the matter.