Chinese tea chain ChaPanda is aiming to raise HK$2.6bn ($330m) through an initial public offering (IPO) on the Hong Kong Stock Exchange.

The IPO is scheduled for 23 April 2024, marking the first entry for a new tea beverage company to the exchange since 2021.

The funds are earmarked for enhancing the company’s supply chains and for the refurbishment and technological advancement of its stores and production facilities.

The company, also known as ChaBaiDao, is renowned for its bubble tea and fruit-infused tea offerings.

It plans to offer 147.7 million shares, around 10% of its total, at HK$17.50 ($2.23) each. An additional 22.1 million shares could also be issued through a greenshoe option, potentially increasing the IPO’s value to HK$3bn ($380m) if demand for the shares is strong.

ChaPanda is owned by Chinese billionaire Wang Xiaokun, who holds an 18.02% stake, while his wife, Liu Weihong, controls 5.74%.

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Their holding company, Hengsheng Herui, owns a majority 67.67% stake in the tea chain.

Since its inception in Chengdu in 2008, ChaPanda has expanded its franchise network to 7,900 locations across China, primarily in first and second-tier cities.

The brand is now targeting expansion in lower-tier cities, which are seen as having significant potential for consumption growth.

The tea chain has previously secured two investment rounds totalling 17.5bn yuan ($2.4bn).

In 2023, ChaPanda reported a 35% year-on-year sales increase, reaching 5.7bn yuan ($788m).

It currently ranks as the third-largest tea chain in the country by the number of outlets, trailing behind Mixue and Guming which have more than 36,000 and 9,000 respectively.

ChaPanda is also exploring international markets. It opened a store in Seoul, South Korea, in January 2024 and plans to inaugurate another overseas store in April. The company is considering further expansion into Thailand, Vietnam and Malaysia.