Naixue's Tea, one of the largest bubble tea chains in China, has filed for a US public listing that could raise as much as $400 million, sources with knowledge of the bidding said.
Naixue, which sells fresh fruit beverages like cold-brew and cheese-tea blends as well as pastry items, operates over 230 branches across mainland China. The tea chain was unveiled in 2010 by the Shenzhen Pindao Restaurant Management.
The company has been consulting with market experts on the sale of its stocks which could occur in the coming months, Bloomberg News reported on Wednesday.
Naixue Tea is also working to raise around $50 million to $100 million in a pre-initial public bid funding series, sources who asked not to be named as the matter is ongoing, disclosed.
The sources also pointed out that information about the company's initial public offering in the US, like listing venue, size and timeline could change depending on how the coronavirus crisis is impacting global market sentiment at the moment. An executive of Shenzhen Pindao did not issue any response when requested to comment.
Based on figures released by Bloomberg, headed by DouYu International Holdings and Luckin Coffee, companies in China were able to raise approximately $3.7 billion through US listings since 2019.
The figures also noted that among the nine Chinese companies, Citic Capital Acquisition Corporation is one company that finalized its US first-time stock sales this year with the generated funding totaling $722 million.
According to international consultancy agency Euromonitor, more than 66 million quarts of hot tea and almost 14 million quarts of cold tea were sold in China in 2016, making the country the biggest tea market in the world. And these figures show that China clearly has the potential to continue to grow.
Data released by Kantar Worldpanel show that city residents in China alone aged 15 to 45 buy more than 14 cups of freshly brewed tea drinks per year with an average price of 15.2 yuan (1.77 pounds). This makes the country an important international market with a value of more than 97 billion yuan.
Xu Rongcong, a market strategist at China Merchants Securities, said that traditional tea "cannot satisfy the increasing demand of young Chinese customers" born after the 1980s anymore.
On top of consuming a wide selection of beverage flavours and ingredients compared to their elders, today's younger tea addicts prefer an order-to-go style, rather than going out of their way and spend hours inside a tea shop, which is actually good for business, too.
