ChaPanda to become the second tea chain to go public

The race to become the second new-style tea chain to go public has concluded, as Sichuan Baicha Baidao, the company behind the brand ChaPanda plans to start its IPO process on 18 April before listing publicly at the Hong Kong Stock Exchange (HKEX) on 23 April. The company aims to raise 2.46 billion HKD (314.24 million USD) in the IPO. This comes nearly 3 years after Nayuki became the first new-style Chinese tea brand to go public.

ChaPanda was founded in Sichuan in 2008. Founder Wang Xiaokun famously became a billionaire last August. Data shows that in 2023, ChaPanda ranked number 3 in the freshly-made tea sector in terms of sales, and has a 6.8% market share, up from 6.6% in 2022. Its prospectus shows that ChaPanda earned 5.70 billion RMB (787.43 million USD) in revenue last year, up from 4.23 billion RMB (584.36 USD) in 2022. It also had a profit margin over 20% in 2021, 2022 and 2023. Currently, the chain has 8,016 branches in China, covering 31 provinces and municipalities.

Last month, the brand faced controversy when two branches in Changsha and Wuhan were found to have changed the expiry dates on ingredients. The chain quickly shut down the two locations and started a thorough inspection of all its branches before issuing an apology on social media. Since then, ChaPanda has been releasing branch inspection reports on its official WeChat account. The problem was partly due to the rising ingredient costs the brand has been experiencing. Pundits have concerns about ChaPanda’s supply chain as it still works in a conventional purchasing mode while competitors Mixue Bingcheng and Goodme (Guming) are building production centres across China to supply their branches.

Both Mixue Bingcheng and Goodme filed for IPO in HKEX on 2 January this year, but ChaPanda has got ahead in the process. Auntea Jenny followed suit in February. There has also been rumours that Chagee is planning to go public in the US, aiming for a 300 million USD IPO. As the tea and coffee industry grows and competition deepens, brands are trying to get investment to expand and gain more market share. It will be interesting to watch and see if these brands can lure investors as much as consumers.


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