Updated Version 1 - Chinese tea beverage brand Chagee Holdings Ltd. makes a strong debut on NASDAQ with stock price soaring, reaching a valuation of 6.2 billion USD
Chinese tea brand Chagee Holdings Ltd. made its debut on NASDAQ, with its stock price rising by 21%, reaching a valuation of $6.2 billion. The company issued 14.7 million ADS, raising $411 million, making it the largest IPO of a Chinese consumer company since the electronic cigarette company Smoore Technology in 2021. Market reactions indicate investor confidence in the Chinese government's promotion of consumption. Founder Zhang Junjie holds nearly 54% of Class B shares, possessing 89% of the voting rights
(New details and analyst comments)
Reuters, April 17 - Chinese tea beverage brand Chagee Holdings Ltd. (CHA.O) made its debut on the Nasdaq in the United States on Thursday, with its stock price soaring 21%, reaching a valuation of $6.2 billion, unaffected by the China-U.S. trade war. Chagee's American Depositary Shares (ADS) opened at $33.75 per share, while the initial public offering (IPO) price was $28, at the upper end of the estimated range of $26-$28. Chagee issued 14.7 million ADS, raising $411 million, making it the largest listing by a Chinese consumer company since the $1.4 billion IPO of electronic cigarette company Smoore Technology in January 2021, according to Dealogic. The market's reaction highlights investor confidence in the Chinese government's commitment to promoting domestic consumption and supporting capital markets. "We have recently seen many IPOs related to China as investments in the growth of Chinese consumers, so we believe these companies are relatively insulated from tariff-related disruptions," said Josef Schuster, CEO of IPOX. Chagee was founded by Zhang Junjie in 2017 and, as of the end of March, had nearly 6,700 stores worldwide, most of which are located in high-end shopping malls across China, operating under a franchise system. Last year's total transaction volume was 29.5 billion yuan ($4.03 billion).
Four cornerstone investors, including CDH Investments and fund management company Redwheel, have expressed interest in subscribing to $205 million of ADS in this IPO. Zhang Junjie will continue to hold nearly 54% of the company's Class B shares, each with 10 votes, giving him 89% of the total voting power. According to Dealogic, the amount raised by Chinese companies on U.S. exchanges has dropped from $1.39 billion in 2021 to $1.39 billion in 2024, a decline of 91%. U.S. Treasury Secretary Scott Bessent stated in an interview with Fox Business Network last week that the possibility of delisting Chinese companies from U.S. exchanges cannot be ruled out, and that all options are on the table
