Ba Wang Cha Ji Raises $411M in Nasdaq IPO, Achieves $5.139B Market Cap

On April 17, the Chinese tea brand Ba Wang Cha Ji successfully listed on the Nasdaq, becoming the first Chinese tea brand to go public in the United States. The stock is traded under the ticker symbol "CHA." The underwriters for this IPO included Citigroup, Morgan Stanley, CICC, and Deutsche Bank.

Ba Wang Cha Ji's IPO was priced at $28 per share, at the high end of the proposed range of $26 to $28. The company issued 14.68 million American Depositary Shares (ADS), raising $411 million and achieving a market capitalization of $5.139 billion.

Investor interest in Ba Wang Cha Ji's IPO was significant, with demand for ADSs being several times the amount issued. Investors included Chinese funds and global long-only institutions. Notable investors expressing interest in purchasing ADSs at the IPO price included IDG Capital, RWC Asset Management, RWC Asset Advisors (US), Allianz Global Investors Asia Pacific Ltd., and Orbis Asia Asset Management.

Ba Wang Cha Ji was founded in 2017, inspired by the global success of international coffee chains in transforming coffee drinking into a lifestyle and social phenomenon. The company aims to replicate this success with tea, leveraging technology and branding to create a modern tea-drinking experience that connects people and cultures worldwide.

In less than eight years, Ba Wang Cha Ji has grown to become the largest, fastest-growing, and most popular premium tea brand in China. As of December 31, 2024, the company operates 6,440 stores, with 6,284 located in China, making it the largest store network among all premium tea brands in the country.

In 2023 and 2024, Ba Wang Cha Ji generated gross merchandise value (GMV) of 10.8 billion yuan and 29.5 billion yuan, respectively. The company has shown rapid growth, with over 1,000 stores in China, making it one of the fastest-growing tea brands in the region.

Ba Wang Cha Ji's flagship product, tea latte, accounted for approximately 79%, 87%, and 91% of the company's GMV in China in 2022, 2023, and 2024, respectively. The top three best-selling tea lattes contributed 44%, 57%, and 61% to the company's GMV in China during the same periods.

As of December 31, 2024, Ba Wang Cha Ji operates 6,284 stores in 32 out of 34 provincial administrative regions in China, along with 156 overseas stores. Of these, 6,271 are franchised stores, and 169 are company-owned. The company directly manages 398 stores, including all company-owned stores and 229 franchised stores.

The number of Ba Wang Cha Ji stores increased by 83.4% from 3,511 at the end of 2023 to 6,440 at the end of 2024. The company's total GMV grew by 734.3% from 1.294 billion yuan in 2022 to 10.793 billion yuan in 2023, and further increased by 172.9% to 29.458 billion yuan in 2024.

Ba Wang Cha Ji's net revenue grew by 843.8% from 491.7 million yuan in 2022 to 4.64 billion yuan in 2023. In 2024, the company's net revenue reached 12.406 billion yuan (1.699 billion USD), a year-over-year increase of 167.4%. The company's net profit for 2024 was 2.515 billion yuan, with a net profit margin of 20.3%.

The average number of cups sold per store per month in China increased from 8,981 in 2022 to 25,099 in 2024. The average monthly GMV per store in China grew from 177,500 yuan in 2022 to 511,700 yuan in 2024.

The premium tea market in China is growing rapidly, with a compound annual growth rate of 21.7% from 102.2 billion yuan in 2019 to 272.7 billion yuan in 2024. This growth is expected to continue, reaching 426 billion yuan by 2028. The high-end tea segment, defined by an average price of 17 yuan per cup or more, has seen its market share increase from 10.9% in 2019 to 25.9% in 2024, and is projected to reach 167.1 billion yuan by 2028, accounting for 31.7% of the total tea market.

Globally, the tea market is also expanding. In 2024, the global tea market had a GMV of 467.1 billion USD, and is expected to reach 601.9 billion USD by 2028. The ready-to-drink tea market is particularly popular overseas, with a projected GMV of 122 billion USD by 2028, growing at a compound annual rate of 18.9% from 2024 to 2028.

Ba Wang Cha Ji plans to use the proceeds from its IPO to expand its store network in China and overseas, develop and innovate new products, build a global supply chain network, invest in technology to support business growth and operations, and for general corporate and operational purposes.