HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>Chagee may think that US IPO will help it gain greater imagination space/higher valuation. Although the tariff war is “a big surprise”, conservative IPO pricing still secure a good debut.</li>
<li>If Chagee can successfully achieve internationalization and reverse the trend of declining performance, its market value could reach US$10.9 billion. However, Chinese concept stocks would still face valuation discounts.</li>
<li>If same store GMV fails to stabilize, or overseas market penetration is lower-than-expected, or conflict between China and the US escalates, share price would face correction, with valuation falling below Starbucks.</li>
</ul>


Chagee may think that US IPO will help it gain greater imagination space/higher valuation. Although the tariff war is “a big surprise”, conservative IPO pricing still secure a good debut.
If Chagee can successfully achieve internationalization and reverse the trend of declining performance, its market value could reach US$10.9 billion. However, Chinese concept stocks would still face valuation discounts.
If same store GMV fails to stabilize, or overseas market penetration is lower-than-expected, or conflict between China and the US escalates, share price would face correction, with valuation falling below Starbucks.


Chagee Holdings - Thoughts on the IPO Debut and the Valuation Outlook

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.

<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>  raised around US$411m in its US IPO, after pricing the deal at the top of the range at US$28/share. </li>
<li>Chagee (CG) is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.</li>
<li>In this note, we talk about the trading dynamics and added a new peer to compare with  </li>
</ul>



Chagee Holdings (CHA US)  raised around US$411m in its US IPO, after pricing the deal at the top of the range at US$28/share. 
Chagee (CG) is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
In this note, we talk about the trading dynamics and added a new peer to compare with  


Chagee IPO Trading: Delisting Overhang but Much Cheaper than Peers

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<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> 's IPO valuation discount to its peers, including HK-listed tea-beverage players as well as US-listed China-based coffee-beverage player, suggest a strong potential upside on listing.</li>
<li>US Investor concern over impact of tariffs and caution due to lingering memories of the Luckin Coffee scandal could translate to higher risk premium for the stock.</li>
<li>Expect Chagee to trade at a discount to budget beverage peers like <a href="https://www.smartkarma.com/entities/mixue-group" target="_blank" data-smartkarma-citation="entities:40623:1" rel="noopener">Mixue Group (2097 HK)</a> given its limited room for network expansion within China and likely slower overseas growth.</li>
</ul>



Chagee Holdings (CHA US) 's IPO valuation discount to its peers, including HK-listed tea-beverage players as well as US-listed China-based coffee-beverage player, suggest a strong potential upside on listing.
US Investor concern over impact of tariffs and caution due to lingering memories of the Luckin Coffee scandal could translate to higher risk premium for the stock.
Expect Chagee to trade at a discount to budget beverage peers like Mixue Group (2097 HK) given its limited room for network expansion within China and likely slower overseas growth.


Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.

US IPOs and Secondary Offerings, IPO Boutique

IPO Boutique

US IPOs and Secondary Offerings

For more than 20 years, we have been providing research, analysis, commentary and ratings on US Equity Capital Markets to institutional investors (US IPOs and Secondary Offerings). Our vast network of contacts across the Equity Capital Markets and attention-to-detail sets us apart from our competitors.

Since 2012, we have achieved a successful hit rating on 89% of Buy-rated IPOs. The collective “Buy” ratings averaged a first trade of 16.3% above issue.Our Neutral Rated Deals averaged just 2% above the issue price at first trade.

Our written research includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

In addition, we provide a high-touch premium desk access which includes analyst access, as well as real time insights on US IPOs as well as secondary offerings.

IPOs and Secondary Offerings

<ul>
<li>Chagee's order book is heavily influenced from Asian Investors as the deal is considered multiple-times oversubscribed.</li>
<li>The underwriters and company came to market with a manageable size transaction and an attractive valuation.</li>
<li>The geopolitical headwinds, specifically between China and the United States, is forcing many traditional IPO investors to stay on the sidelines. </li>
</ul>


Chagee's order book is heavily influenced from Asian Investors as the deal is considered multiple-times oversubscribed.
The underwriters and company came to market with a manageable size transaction and an attractive valuation.
The geopolitical headwinds, specifically between China and the United States, is forcing many traditional IPO investors to stay on the sidelines. 


Chagee Holdings Limited (CHA): International Investors to Dominate the IPO Order Book

<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 offering 14.68 million shares for USD26 to USD28 each to raise upto USD411 million in its initial public offering in the US.</li>
<li>Chagee's premium branded teahouses blend traditional tea culture with modern, tech-driven service, distinctly setting itself apart from bubble tea kiosks. </li>
<li>Chagee's IPO is priced at a discount to forward valuations of recently listed (in HK) China-based freshly brewed drinks players and leading Cafe companies.</li>
</ul>



Chagee Holdings (CHA US) is offering 14.68 million shares for USD26 to USD28 each to raise upto USD411 million in its initial public offering in the US.
Chagee's premium branded teahouses blend traditional tea culture with modern, tech-driven service, distinctly setting itself apart from bubble tea kiosks. 
Chagee's IPO is priced at a discount to forward valuations of recently listed (in HK) China-based freshly brewed drinks players and leading Cafe companies.


Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials

China

Luckin Coffee Inc. provides non-alcoholic beverages. The Company offers various types of coffee. Luckin Coffee serves customers in China.

Price Gauge
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Luckin Coffee (LKNCY US)

Chagee Holdings - Thoughts on the IPO Debut and the Valuation Outlook

Chagee aims for US IPO to boost valuation, but tariff war is a big surprise.Market value may reach $10.8bn if internationalization succeeds, but...

Xinyao (Criss) Wang

Chagee IPO Trading: Delisting Overhang but Much Cheaper than Peers

Chagee raised around US$411m in its US IPO, after pricing the deal at the top of the range at US$28/share. In this note, we talk about the trading...

Nicholas Tan

Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.

Investors can expect a strong upside on listing despite the backdrop of tariff-related market concerns given Chagee’s IPO is priced at a notable...

Devi Subhakesan

Chagee Holdings Limited (CHA): International Investors to Dominate the IPO Order Book

Chagee's IPO attracts heavy interest from Asian investors despite geopolitical tensions, with a manageable size transaction and attractive valuation.

IPO Boutique

Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials

Chagee - the premium teahouse chain - has priced its US IPO at US$26 to US$26, at a valuation discount to freshly made beverage players listed in...

Devi Subhakesan

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Chagee Holdings - Thoughts on the IPO Debut and the Valuation Outlook

​Chagee aims for US IPO to boost valuation, but tariff war is a big surprise.Market value may reach $10.8bn if internationalization succeeds, but...

Xinyao (Criss) Wang

Chagee IPO Trading: Delisting Overhang but Much Cheaper than Peers

Chagee raised around US$411m in its US IPO, after pricing the deal at the top of the range at US$28/share. In this note, we talk about the trading...

Nicholas Tan

Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.

Investors can expect a strong upside on listing despite the backdrop of tariff-related market concerns given Chagee’s IPO is priced at a notable...

Devi Subhakesan

Chagee Holdings Limited (CHA): International Investors to Dominate the IPO Order Book

​Chagee's IPO attracts heavy interest from Asian investors despite geopolitical tensions, with a manageable size transaction and attractive valuation.

IPO Boutique

Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials

Chagee - the premium teahouse chain - has priced its US IPO at US$26 to US$26, at a valuation discount to freshly made beverage players listed in...

Devi Subhakesan

Chagee aims for US IPO to boost valuation, but tariff war is a big surprise.Market value may reach $10.8bn if internationalization succeeds, but...

Chagee's IPO attracts heavy interest from Asian investors despite geopolitical tensions, with a manageable size transaction and attractive valuation.