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Tepid response to Nayuki, world’s first listed milk tea firm, in Hong Kong amid concerns about outlook, high pricing

  • Stock fell 13.5 per cent at the close on debut in Hong Kong
  • People are concerned about performance and operational efficiency, as it has not earned a profit yet, analyst says

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A Nayuki store in Beijing. The company had 491 shops in China as of the end of last year. Photo: Reuters
Iris Ouyang
Nayuki Holdings, the world’s first listed milk tea chain, slumped on its Hong Kong debut, on concerns about its earnings outlook and relatively high pricing.
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The Shenzhen-based company closed 13.50 per cent lower at HK$17.12 on Wednesday from its initial public offering price of HK$19.80, valuing it at HK$29.4 billion (US$3.8 billion). The stock opened trading 4.8 per cent lower at HK$18.86.

“The market was comparing Nayuki to restaurant chains such as Haidilao and Jiumaojiu, and its listed price was close to theirs. But investors think tea chains are different from restaurants,” said Albert Yu, analyst at Zhongtai International in Hong Kong. “People are concerned about the per shop performance and its operational efficiency, as it hasn’t earned a profit yet.”

Founded by couple Peng Xin and Zhao Lin in 2015, Nayuki burnt close to 137 million yuan (US$21.2 million) between 2018 and last year. In 2020, its average daily sales per teahouse dropped 27 per cent to 20,200 yuan from a year earlier, partly because of the coronavirus pandemic. But in 2019 too, its sales were down, declining 9.8 per cent year on year.

But Nayuki has the widest network of shops in the segment, according to China Insights Consultancy. It had 491 shops in China as of the end of last year, covering 66 cities, and one shop in Japan and Hong Kong, respectively. It has also emerged as the second-largest high-end fresh handmade tea brand in China with 18.9 per cent market share. Hey Tea, which is owned by Shenzhen Meixixi Catering Management, is the largest such company in China.
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The stock added 1.8 per cent in grey market trading on Tuesday, after rallying by as much as 11 per cent earlier. The shares were overbought 432 times by 138,807 retail investors.

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