Cold bubble tea on a hot summer day.
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Shares in Chinese tapioca chain Chabaidao fell about 40% in its trading debut on the Hong Kong Stock Exchange.
The stock, officially listed as Sichuan Baicha Baidao Industrial, fell to HK$10.84 late in the morning, about 38% below its public price of HK$17.50.
The bubble tea company’s IPO was the biggest listing in Hong Kong so far in 2024, with the company reporting a net profit of HK$2.59 billion, excluding listing costs. its prospectus Submitted to Hong Kong Exchange.
The company announced that it will rank third in China’s fresh tea shop market by retail sales in 2023, with a market share of 6.8%.
Chabaidao sold 90% of its 147.7 million shares in a global public offering, and the remaining 10% in Hong Kong.
However, the subscription ratio for the public offering was only 0.5x, so the company decided to reallocate the remaining shares to a global public offering with a subscription ratio of 1.11x.
Chabaidao said in its prospectus that its sales for the fiscal year ending 2023 were 5.7 billion yuan ($786.8 million), and gross profit for the same period was 1.96 billion yuan.
It added that the compound annual growth rate of net profit from 2021 to 2023 reached 21.6%.
