APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chagee-holdings-limited" target="_blank" data-smartkarma-citation="entities:45011:1" rel="noopener">Chagee Holdings (CHA US)</a>  is planning to raise up to US$500m through its upcoming US IPO.</li>
<li>It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.</li>
<li>We have looked at the company’s past performance in our earlier notes. In this note, we discuss latest industry dynamics, conduct a quick peer comparison and discuss the company’s valuation.</li>
</ul>



Chagee Holdings (CHA US)  is planning to raise up to US$500m through its upcoming US IPO.
It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
We have looked at the company’s past performance in our earlier notes. In this note, we discuss latest industry dynamics, conduct a quick peer comparison and discuss the company’s valuation.


Chagee IPO: Peer Comp and Thoughts on Valuation

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>Chagee is the No. 6 largest teahouse chain in China according to store number.</li>
<li>Very few teahouses have a per customer transaction higher than Chagee.</li>
<li>We believe Chagee has advantages in the high price market.</li>
</ul>


Chagee is the No. 6 largest teahouse chain in China according to store number.
Very few teahouses have a per customer transaction higher than Chagee.
We believe Chagee has advantages in the high price market.


Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors - A Viewpoint on the Ground

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chagee-holdings-limited" target="_blank" data-smartkarma-citation="entities:45011:1" rel="noopener">Chagee Holdings (CHA US)</a>, a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.</li>
<li>In <em><strong><a href="https://www.smartkarma.com/insights/chagee-holdings-cha-us-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:181653" rel="noopener">Chagee Holdings (CHA US) IPO: The Bull Case</a></strong></em>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on unsustainable growth rates, pressure on KPIs, signs of margin pressure, increasing S&amp;M expenses and weakening forward growth indicators.</li>
</ul>



Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
In Chagee Holdings (CHA US) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on unsustainable growth rates, pressure on KPIs, signs of margin pressure, increasing S&amp;M expenses and weakening forward growth indicators.


Chagee Holdings (CHA US) IPO: The Bear Case

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Chagee Holdings (CHA US) is getting ready to complete its IPO on NASDAQ in the next several weeks. Chagee is one of the largest premium tea chains in China. </li>
<li>The company's sales and profits have been exploding higher in the past three years. Its sales jumped from 0.5 billion RMB in 2022 to 12.4 billion RMB in 2024. </li>
<li>Chagee could raise more than<a href="https://thebambooworks.com/forget-the-pearls-and-cheese-chagee-says-offering-up-simpler-milk-teas-for-u-s-investors/" target="_blank" rel="noopener"> $500 million</a> in this IPO. However, this is subject to change. </li>
</ul>


Chagee Holdings (CHA US) is getting ready to complete its IPO on NASDAQ in the next several weeks. Chagee is one of the largest premium tea chains in China. 
The company's sales and profits have been exploding higher in the past three years. Its sales jumped from 0.5 billion RMB in 2022 to 12.4 billion RMB in 2024. 
Chagee could raise more than $500 million in this IPO. However, this is subject to change. 


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Chagee adopts the "1+1+9+N" business model, which ensures the successful replication of the single store model. However, we saw performance decline in 2024, and future performance growth sustainability is uncertain.</li>
<li>In terms of valuation, comparable companies include Starbucks and MIXUE. We think valuation of Chagee should be lower than MIXUE and Starbucks as both have proved themselves in the industry.</li>
<li>Future growth would inevitably slow down. Investors may need more 'safety margins' on valuation because despite short-term strong demand, investors need to be alert to the performance validation after IPO.  </li>
</ul>


Chagee adopts the "1+1+9+N" business model, which ensures the successful replication of the single store model. However, we saw performance decline in 2024, and future performance growth sustainability is uncertain.
In terms of valuation, comparable companies include Starbucks and MIXUE. We think valuation of Chagee should be lower than MIXUE and Starbucks as both have proved themselves in the industry.
Future growth would inevitably slow down. Investors may need more 'safety margins' on valuation because despite short-term strong demand, investors need to be alert to the performance validation after IPO.  


Pre-IPO Chagee Holdings - The Business Model, the Concerns Behind and Valuation Outlook

United States

Chagee Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides a wide range of freshly-made tea drinks. Chagee Holdings serves customers worldwide.

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Chagee Holdings (CHA US)

Chagee IPO: Peer Comp and Thoughts on Valuation

Chagee, a leading premium tea drinks brand, is planning to raise up to US$500m through its upcoming US IPO. In this note, we discuss the company's...

Nicholas Tan

Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors - A Viewpoint on the Ground

Chagee is the No. 6 largest teahouse chain in China according to store number. Very few teahouses have a per customer transaction higher than Chagee.

Ming Lu