Chinese bubble tea chain Chagee has filed for a U.S. initial public offering, aiming to list on the Nasdaq under the ticker symbol “CHA.” The company plans to open its first U.S. store at the Westfield Century City Mall in Los Angeles this spring.
Since its establishment in 2017, Chagee has expanded to over 6,400 teahouses across China, Malaysia, Singapore, and Thailand, with approximately 97% of its locations situated in China as of December 31. According to regulatory filings, Chagee reported a net income of $344.5 million from revenues of $1.7 billion in 2024.
Founder and CEO Junjie Zhang launched the chain to modernize tea consumption, inspired by the success of global coffee brands. China represents Starbucks’ second-largest market.
Chagee’s future goals include serving tea enthusiasts in 100 countries, creating 300,000 employment opportunities globally, and providing 15 billion cups of freshly brewed tea annually.
If successful, Chagee will join a shrinking group of Chinese firms pursuing U.S. listings. From January 2023 to January 2024, the number of Chinese companies listed on the three largest U.S. exchanges dropped by 5%, according to the U.S.-China Economic and Security Review Commission. Heightened political tensions between the U.S. and Beijing have hindered some Chinese companies’ U.S. IPO aspirations. For instance, Shein is now targeting a London IPO after facing opposition from U.S. lawmakers.
U.S. investors may also be cautious about investing in another Chinese beverage chain following Luckin Coffee’s scandal. Luckin, founded in 2017, rapidly expanded and surpassed Starbucks’ store count in China before going public on the Nasdaq in 2019. However, in 2020, Luckin admitted to inflating its sales, leading to its delisting and filing for Chapter 15 bankruptcy. By 2022, Luckin had emerged from bankruptcy, surpassing Starbucks as China’s largest coffee retailer by sales.
— news from CNBC