In December 2024 and January 2025, we saw a surge in attempts from food and beverage brands trying to go public in Hong Kong, mostly via IPO. The tea chain Good Me (古茗, Guming), whose Hong Kong IPO application failed in July last year, submitted its updated prospectus in mid-December. Similarly, Auntea Jenny (沪上阿姨) and Mixue Bingcheng (蜜雪冰城, officially Mixue Ice Cream & Tea) also updated their Hong Kong prospectuses around the turn of the year. Meanwhile, Chinese fast-food chain Home Original Chicken (老乡鸡) also handed in its application to the Hong Kong Stock Exchange (HKEX) on 3 January.
Latest data from the London Stock Exchange Group shows that in 2024, the HKEX regained its place as number 5 in the world in terms of IPO amounts at 11 billion USD, growing 86.7% year-on-year and holding 9.1% market share. Chinese companies, with a total value of 10.5 billion USD, contributed to 96% of the new IPOs.
For tea brands, this happened against the backdrop of the two public tea brands – Naixue (奈雪的茶, formerly Nayuki) and ChaPanda (茶百道), facing profitability difficulties. The analysis says that one of the main reasons why New-style Chinese tea chains are in a rush to get IPOs is due to the lack of profitability and the need for financing to sustain operations and growth, especially when the growth of the tea chain market is slowing down, and investors are starting to drop out.
But why Hong Kong? Despite its challenges, Hong Kong still serves as the portal between Chinese and global economies and finance. For many food and beverage chains, “going overseas” (出海) is the best way to grow after the saturation and fierce competition in China. But with the uncertainty of the global economy still lurking, how the market will react still needs monitoring.
