Sichuan Baicha Baidao, the Chinese bubble tea chain, saw its stock tumble on its first day of trading on the Hong Kong Stock Exchange.
The company, also known as Chabaidao, declined by almost 40% on its trading debut before closing the session 26.8% below its IPO price.
Chabaidao’s public listing was the Asian financial hub’s largest initial IPO so far this year. However, the poor performance on its debut showcases the difficulties facing companies listing in the city.
The company raised around $330m in its IPO despite what was seen as unenthusiastic interest from investors. The company plans to use half of the money raised to upgrade its operations and bolster its supply chain.
According to the company, it ranked third in China’s freshly made tea shop market retail sales value in 2023, with a market share of 6.8%.
90% of the company’s 147.7 million shares were offered globally, while the remaining 10% were in a public offer in Hong Kong. However, with the public offer only 0.5 times subscribed, Chabaidao reallocated the rest of the shares to the global offer, which was 1.11 times subscribed.