The stock of China’s Sichuan Baicha Baidao, also known as ChaPanda, experienced a sharp drop when it debuted on the Hong Kong Stock Exchange. This occurred despite the company raising over $330 million in its initial public offering (IPO).
IPO and market debut: ChaPanda’s shares were initially priced at 17.50 Hong Kong dollars ($2.23) each, making it the largest IPO in the city in 2024. However, on Tuesday, they opened 10.1% lower and closed 26.9% lower at 12.80 Hong Kong dollars ($1.63). opened At one point, the shares dropped as much as 38.3% ($10.80).
- At one point, the shares were down as much as 38.3% ($10.80).
About the company: ChaPanda was established in Chengdu in 2008. Currently, it is the third-largest producer of freshly made tea beverages in China, operating 8,016 stores across 31 provinces, autonomous regions, and major municipalities. bubble tea — boasting Market implications:
Tuesday’s disappointing debut reflects broader issues in the Hong Kong stock market, which has been slow due to economic challenges and low investor confidence. Hang Seng Index due to (HSI), which serves as the primary indicator of market performance in Hong Kong, has displayed a downward trend, further dampening the IPO climate.
- The Industry impact: The sharp decline in ChaPanda's stock prices could indicate caution for the bubble tea industry, particularly for other chains considering IPOs. This significant decrease highlights potential investor doubt regarding the sustainability and profitability of bubble tea companies in a crowded and highly competitive market, despite the industry's popularity and rapid growth in China and abroad.
Future plans: ChaPanda plans to utilize its IPO funds to enhance its supply chain and digitize its operations.
Shares of China’s Sichuan Baicha Baidao, also known as ChaPanda, saw a steep decline in its debut on the Hong Kong Stock Exchange despite raising over $330 million in its initial public offering (IPO).
IPO and market debut: ChaPanda’s shares were initially priced at 17.50 Hong Kong dollars ($2.23) each, marking the city’s largest IPO so far in 2024. But on Tuesday, they opened 10.1% lower and closed 26.9% lower at 12.80 Hong Kong dollars ($1.63). ChaPanda intends to use its IPO funds to improve its supply chain and digitize its operations.
