Chinese tea brand Chagee targets $5.1 billion valuation in US IPO amid choppy market conditions
April 10 (Reuters) - Chinese tea chain Chagee said on Thursday it was targeting a valuation of up to $5.1 billion in its New York initial public offering, braving choppy market conditions.
Market volatility stemming from uncertainty over U.S. trade policy has tempered IPO market activity as companies adopt a wait-and-see approach before proceeding with their stock market debuts.
here.
Shanghai-based Chagee is seeking up to $411 million by offering nearly 14.7 million American depositary shares priced between $26 and $28 each.
The IPO also comes at a time when the world's two biggest economies are locked in an escalating trade war, prolonging macroeconomic uncertainty.
While Chagee warned of some hit from the tariffs, it said "cross-border trade" was not its principal business. All of its products are manufactured in China.
Chagee, which specializes in raw-leaf fresh milk tea, is the latest in a string of Chinese consumer brands to pursue offshore IPOs in recent months.
Chinese IPOs on U.S. exchanges raised $1.15 billion in 2024, compared with $469.7 million in 2023, according to data compiled by LSEG. That amount was still far below the $12.85 billion raised in 2021.
Cornerstone investors have indicated interest in purchasing Chagee's shares worth up to $205 million sold in the IPO.
RAPID RISE
Founded in 2017 by Junjie Zhang, Chagee opened its first store in Yunnan province and has since rapidly expanded across and beyond China.
The tea brand generated 29.5 billion yuan ($4.03 billion) in sales last year, with over 6,000 teahouses worldwide at the end of 2024. Nearly all of its stores are set in China under a franchise scheme.
Chagee plans on serving customers across 100 countries and selling 15 billion servings annually as it aggressively expands its global reach.
In recent years, Chagee has expanded across Southeast Asia, entering Malaysia, Singapore and Thailand.
Chagee will use IPO proceeds to expand its teahouse network in China and abroad, among other purposes.
Chagee will list on the Nasdaq under the symbol "CHA".
Citigroup, Morgan Stanley, Deutsche Bank and CICC are the lead underwriters for the offering.
($1 = 7.3140 Chinese yuan renminbi)
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