Chinese tea chain Chagee is forging ahead with a plan to raise almost $400 million in a US initial public offering this week, amid growing trade tensions between the US and China and overall market volatility, the Financial Times reports.
The Shanghai brand, which specializes in coffee-flavored tea beverages such as 'teaspressos' and oolong 'teapuccinos,' is hoping to raise $396 million from its Nasdaq listing, with shares set to be priced between $26 and $28. In case it succeeds, the listing would value the company at about $5.2 billion on a fully diluted basis.
As per coherent market insights, tea industry is expected to grow at a CAGR of 6.3% from the forecast period 2025-2032. The market is predicted to reach USD 22.78 Bn in 2025 and is expected to increase to USD 34.96 Bn by 2032. Industry size is being driven by growing awareness regarding the health impacts of tea consumption.
Chagee's issue would be the second-largest US initial public offering of a Chinese firm in more than three years.
The flotation occurs against a background of new trade tensions, following the escalation by the US of tariffs which currently impose duties of up to 120% on Chinese imports.
In spite of trade headwinds, institutional investor demand seems robust. Chagee's prospectus indicates that CDH Investment Management, Allianz Global Investors Asia Pacific, ORIX Asia Asset Management, and RWC Asset Management have expressed 'nonbinding' interest in buying 51.7% of the available shares.
Chagee's rapid expansion in China might be attracting investors. The group operated 6,440 outlets at the end of 2024, a rise of 83% year-on-year, while yearly revenue jumped 167% to almost $1.7 billion.
The IPO is being sponsored by Citigroup, Morgan Stanley, Deutsche Bank, and China International Capital Corporation.
Source:
Ecommerce PLatform: FOODBEV MEDIA Ltd.
Company: Chagee
