Chinese bubble tea chain Chagee files for U.S. initial public offering

Chinese bubble tea chain Chagee filed for a U.S. initial public offering on Tuesday, looking for to commerce on the Nasdaq utilizing the ticker “CHA.”

The IPO submitting comes as the corporate prepares to open its first U.S. retailer within the Westfield Century Metropolis mall in Los Angeles this spring.

Since its founding in 2017, the corporate has grown to greater than 6,400 teahouses throughout China, Malaysia, Singapore and Thailand, as of Dec. 31, in keeping with a regulatory submitting. Roughly 97% of its areas are in China.

Chagee mentioned it generated internet revenue of $344.5 million from income of $1.7 billion in 2024.

Founder and CEO Junjie Zhang created the chain to modernize tea ingesting after being impressed by the success of worldwide espresso firms, in keeping with a regulatory submitting. China is Starbucks’ second-largest market.

Trying forward, Chagee desires to “serve tea lovers in 100 nations, generate 300,000 employment alternatives worldwide, and ship 15 billion cups of freshly brewed tea yearly,” in keeping with the corporate’s web site.

If Chagee goes public on the Nasdaq, it would be part of the dwindling variety of Chinese firms looking for a U.S. itemizing. From January 2023 to January 2024, the variety of Chinese firms listed on the three largest U.S. exchanges fell 5%, in keeping with the U.S.-China Financial and Safety Assessment Fee.

As relations between the U.S. and Beijing have grown frostier, political scrutiny has dashed some Chinese firms’ hopes of a U.S. IPO. Shein is now planning a London IPO for later this yr after lawmakers pushed again on its plans to go public on a U.S. alternate.

U.S. buyers may additionally be cautious to spend money on one other Chinese beverage chain after the instance set by Luckin Espresso.

Luckin was based in 2017 and grew rapidly. By 2019, it had outnumbered the variety of Starbucks areas in China and gone public on the Nasdaq.

However in 2020, Luckin disclosed that it had inflated its gross sales, leading to its delisting from the Nasdaq. The corporate filed for Chapter 15 chapter. Luckin emerged from chapter by 2022, minus the executives that have been accountable for the fraud.

Since then, it has overtaken Starbucks as China’s largest espresso retailer by gross sales.