Bubble tea chain Nayuki slides up to 13% in Hong Kong debut

[HONG KONG] Chinese bubble tea chain Nayuki Holdings fell on its Hong Kong trading debut on Wednesday despite a well-received share sale.

Shares of the teahouse operator opened at HK$18.86, before falling to as low as HK$17.30. That's down 13 per cent from its top-of-the range offering price of HK$19.8 per share.

The IPO raised US$656 million and the retail portion was 432 times subscribed. Institutional books closed a day earlier than scheduled due to demand.

Nayuki's weak debut comes as bankers in Asia expect stock listing aspirants to likely face a less generous market following a first-half sales boom, as bubbly valuations and nervousness about US monetary policy make investors more cautious.

Firms in Asia have raised US$82 billion through initial public offerings so far this year, the most ever for a first half, and beating the previous record of US$63 billion seen during a comparable period in 2010, data compiled by Bloomberg show.

Meanwhile, Hutchmed China, a cancer drug developer backed by billionaire Li Ka-shing which also debuted on Wednesday, jumped as much as 49 per cent after raising US$537 million from a relatively lukewarm share sale.

The fluctuations illustrate that investors are getting pickier while more firms are tapping the Asian financial hub's once-again active IPO market. At least nine deals have been priced this month, compared to only two in April and four in May, according to data compiled by Bloomberg.

Angelalign Technology, a maker of clear orthodontic braces, more than doubled on its debut earlier this month, becoming one of this year's most popular offerings in the city. But not every listing gets a warm welcome. China Youran Dairy Group, for example, fell 12 per cent on its debut.

Next up, investors will be looking at New-York traded Chinese electric-vehicle maker Xpeng, which is said to raise US$1.8 billion in a dual primary listing.

Nayuki plans to use proceeds from the offering to expand its teahouse network, deepen market penetration and strengthen its supply chain, according to its listing prospectus. It had 491 flagship Nayuki outlets at the end of last year, including 489 in mainland China and one each in Hong Kong and Japan.

The Shenzhen-based firm sells fresh-fruit teas, cold-brew beverages and baked goods. It recorded losses of 203 million yuan (S$42.3 million) in 2020 and 40 million yuan in the previous year, according to its prospectus. Revenue rose 22 per cent year-on-year to 3.1 billion yuan.

JPMorgan Chase & Co, CMB International Capital and Huatai International are joint sponsors for the listing.

BLOOMBERG