According to sources quoted by Reuters' IFR, Sichuan Baicha Baidao Industrial plans to list in Hong Kong in the first quarter of this year and raise up to US$300 million. Previously, Cha Baidao had completed the Hong Kong stock listing filing, which means that the company has obtained the prerequisites for the Hong Kong listing hearing.
Cha Baidao had conducted Hong Kong NDR in November last year.
In 2008, the first Tea Baidao was born in Chengdu. In February 2017, Chabaidao Catering was established. Through an efficient and win-win franchise model, Chabaidao has now developed into a leading enterprise in new tea drink brands in the country.
The prospectus shows that as of August 8, 2023, Chabaidao has a total of 7,117 stores across the country, covering 31 provinces and cities across the country, achieving full coverage of all provinces and cities at all levels in mainland China. In 2022, the retail sales of Chabaidao stores will reach approximately RMB 13.3 billion, with a compound annual growth rate of 139.7% from 2020 to 2022.
According to the prospectus, since its establishment, Chabaidao has focused on exploring creative combinations of natural ingredients and Chinese tea drinks, adhering to the core product concept of "good tea as the base, making freshness", and continues to develop high-quality, diversified, and creative new tea products, and is committed to allowing consumers to drink fresh and healthy tea products anytime and anywhere.
Chamoido has strategically opened Chamoido stores in all tier cities across the country. While maintaining its position in first-tier and new first-tier cities to enhance brand awareness and keep up with changing market trends, it has penetrated and will continue to penetrate into lower-tier cities with huge consumption growth potential.
According to a report by Frost & Sullivan, Chabaidao is the fastest growing among the top ten new tea beverage companies in China, with the highest compound annual growth rate in retail sales from 2020 to 2022. According to Frost & Sullivan, Chabaidao ranks third in China's new tea shop market in terms of retail sales in 2022, with a market share of 6.6%.
Financially, Chamoido's performance was also very strong. Revenue will increase from RMB 1.08 billion in 2020 to RMB 4.232 billion in 2022, with a compound annual growth rate of 97.9%. Revenue increased from RMB 815 million in the three months ended March 31, 2022 to RMB 1.246 billion in the three months ended March 31, 2023, a year-on-year increase of 53.0%. From 2020 to 2022, the compound annual growth rate of net profit will reach 101.3%. For the three months ended March 31, 2022 and 2023, net profit increased by 50.7% year-on-year.
Previously, Chabaidao announced the completion of a new round of financing with a valuation of nearly 18 billion yuan, led by Lanxin Asia, with participation from many well-known investment institutions such as Zhengxingu, Caogen Zhiben, CICC, and Tomato Capital. This financing is not only the first financing disclosed to the public by Chabaidao, but also the first large-scale financing ushered in the new tea drinking track since 2023.
Chabaidao stated that the financing will focus on the upstream construction of intelligent production and processing bases and supply chain bases, as well as the establishment and improvement of digital intelligent systems, with a view to providing consumers with better products and experiences.
Compared with star milk tea brands that are active in the investment market, such as Gu Ming, Heytea, Nayuki's Tea, and Mixue Bingcheng, Chabaidao has always been very low-key in terms of financing despite its 15 years of existence.
It is understood that Cha Baidao was born in Chengdu, Sichuan in 2008. The first store was opened near Wenjiang No. 2 Middle School in Chengdu, targeting students. Judging from the time of its establishment, Chamomodo can be said to be an old player that is still active in the new tea drinking circuit. Today, the leading brands in the circuit, Heytea and Nayuki’s Tea, were established in 2012 and 2015 respectively.
The "Research Report on New Tea Drinks Industry in China in 2021" released by iResearch shows that among China's new tea drink brands, mid-to-low-end brands with an average price of less than 20 yuan account for 85.3% of the market share, while high-end tea drink brands only account for 14.7% of the market share.
The advantages behind Cha Baidao's successful financing and application for a Hong Kong IPO are obvious, including its brand effect, scale effect and positioning.
Chabaidao's products are positioned in the mid-to-high end and are aimed at the mainstream mass market. This segment belongs to the middle of the tower, with a large population base and a large consumer group. Capital takes a fancy to the overall comprehensive strength of Chabaido and its moat, which is why it invests in Chabaido. The listing after financing has played a very good role in supporting Chabaidao's comprehensive strength.