Nayuki’s Tea Edges Down Amid Debut Hong Kong IPO

On the first day of its listing, Nayuki’s Tea dropped by over 10%, dropping to the lowest price of HK $17.3 per share and an issue price of HK $19.8 per share.

On June 30, Nayuki’s Tea officially listed on the Hong Kong Stock Exchange, becoming the “first stock of new-style tea-based beverages”.

On February 11 this year, Nayuki’s Tea submitted its prospectus to the Hong Kong Stock Exchange. On June 29, the firm announced that the IPO price would be set at HK $19.80 per share, standing at the upper end of the guiding price range of HK $17.2-$19.8. In this IPO, Nayuki’s Tea will raise a net total of HK $4.84 billion, with JP Morgan Chase, CMB International and Huatai International acting as co-sponsors.

The firm’s prospectus reveals that from 2018 to 2020, Nayuki’s Tea achieved annual income of RMB 1.087 billion, RMB 2.502 billion and RMB 3.057 billion, respectively, with annual net losses of RMB 69.729 million, RMB 39.68 million and RMB 203 million, respectively. However, in 2020, Nayuki’s Tea recorded an adjusted net profit of RMB 16.643 million, turning losses into profits.

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Currently, owing to the scarcity of the market, institutions are bullish about the short-term valuation of Nayuki’s Tea.

CITIC Securities stated that, given the fact that Nayuki’s Tea manages to open new stores very quickly and that it is now the first and only publicly-listed player in the tea beverage sector, it is estimated that the company’s market value will reach HK $37.7 billion in 2023.

However, surrounded by competitors such as HeyTea, Modern China Tea Shop and MXBC – as they speed up the pace of their own financing and listing objectives – it is still unknown whether Nayuki’s Tea, after being established for only six years, can take the lead on the new tea track in the future.