In a significant shift reflecting the recovery of the IPO market, three Chinese beverage and food companies are preparing to launch initial public offerings (IPOs) in both mainland China and Hong Kong. Among them is Chagee, a popular tea shop chain known for its bubble tea. On March 25, 2025, Chagee announced plans to offer 64.7 million shares on the Nasdaq market in the United States under the ticker symbol "CHA." This IPO marks a pivotal moment for Chagee as it also prepares to open its first store in the U.S.
Chagee has seen impressive financial performance, reporting a net profit of $344 million and total revenues of $1.7 billion last year. The chain operates approximately 6,400 stores across various countries, including China, Malaysia, Singapore, and Thailand, with about 97% of its outlets located in China. Chagee's IPO follows in the footsteps of other major players in the bubble tea industry, such as Guming Holdings and Mixue, which have also recently filed for IPOs.
Guming Holdings, known for its "Good me" brand, boasts around 9,000 branches across China and successfully raised $1.8 billion Hong Kong (approximately $230 million) by offering 182.4 million shares at a price of $9.94 Hong Kong per share. Meanwhile, Mixue has attracted considerable investor interest, setting its IPO share price at $202.5 Hong Kong (about $25.50) and raising approximately $3.45 billion Hong Kong (around $440 million) through the sale of 17.06 million shares.
The surge in IPO activity among Chinese companies comes at a time when many have faced challenges in their listing plans, primarily due to economic factors and geopolitical tensions. Despite this, the interest in IPOs is indicative of a recovering market, as companies look to expand and raise capital.
According to data from Wind and HKEX, as of April 3, 2025, there are 40 companies seeking to go public on the Hong Kong stock market, a significant increase from just 20 companies during the same period last year. This growing trend suggests that Hong Kong is becoming a more attractive destination for Chinese firms looking to list their shares.
Moreover, analysts predict that the number of A+H share listings, which involve simultaneous listings in both mainland China and Hong Kong, will rise significantly this year. This trend is expected to continue for at least two more years as international investors seek diversification and opportunities in the Chinese market.
In addition to Chagee, other notable companies are also gearing up for IPOs. Contemporary Amperex Technology Co. Limited (CATL), the world's largest manufacturer of electric vehicle (EV) batteries, has received approval from the China Securities Regulatory Commission (CSRC) to issue 220 million shares for sale on the Hong Kong stock market. This IPO could potentially raise up to $5 billion, further showcasing the robust interest in capital markets.
CATL's IPO comes on the heels of other prominent Chinese companies, such as Xiaomi, which is entering the EV market, and BYD, which raised over $11 billion this month alone. The total value of IPOs from Chinese companies this year is estimated at around $15 billion, compared to $18.6 billion raised throughout 2024.
As the Chinese government continues to implement measures aimed at stimulating economic growth—such as reducing interest rates and increasing liquidity—companies are increasingly looking to international markets for funding. However, regulatory challenges remain, as companies must now seek approval from the CSRC before listing shares abroad.
Despite these hurdles, the outlook for Chinese companies seeking to raise capital through IPOs appears positive. Analysts expect that consumer goods companies, in particular, will be among the first to take advantage of this renewed interest in IPOs, thanks to their straightforward business models and lower geopolitical risks compared to other sectors.
In conclusion, the recent flurry of IPO activity among Chinese companies, including Chagee and CATL, signals a revitalized market eager for growth and expansion. As these firms navigate the complexities of international listings, their success could pave the way for more Chinese companies to explore opportunities beyond their domestic markets.
