The IPO Buzz: Chagee Holdings (CHA) Prices IPO at $28 – Top of Range

Chagee Holdings Limited (CHA), a Chinese teahouse chain, priced its IPO at $28.00 – the top of its $26.00-to-$28.00 price range – and sold 14.7 million American Depositary Shares (14,683,991 ADS) – the number of ADS in the prospectus – to raise  $411.15 million on Wednesday night, April 16, 2025. Chagee’s ADS are expected to start trading today – Thursday, April 17 – on the NASDAQ. Each ADS equals one ordinary share, according to the prospectus.

Citigroup, Morgan Stanley, Deutsche Bank Securities and CICC were the joint book-runners.

At pricing, Chagee Holdings had a market cap of about $5.1 billion.

Chagee’s IPO had $205.0 million in indications of interest from four independent investors, according to the cover of the prospectus: CDH Investment Management had indicated an interest in buying $80 million of ADS at the IPO price; RWC Asset Management was in for $60 million; Allianz Global Investors Asia Pacific was in for $50 million, and ORIX Asia Asset Management Limited was in for $15 million.

The IPO’s timing – in the middle of U.S.-China tariff tensions in the headlines – raised  concerns on Wall Street.  

Chagee’s revenue growth and profitability, however, attracted attention.

TEA AND TIME TO TALK

Chagee Holdings Limited (CHA) markets its teahouses as places to relax and enjoy a cup of tea over conversation with friends and family. The company was founded in 2017.

The number of Chagee teahouses rose to 6,681, including 169 teahouses overseas,  as of March 31, 2025 – up from a network of 6,440 teahouses, including 156 teahouses in other countries, as of Dec. 31, 2024, according to the prospectus. Most of Chagee’s teahouses are franchised. Chagee’s recent expansion includes the opening of teahouses in three California locations –  Irvine, Torrance and Santa Monica, according to its U.S. website: Chagee.US

The Chinese teahouse chain is profitable: Chagee Holdings Limited (CHA) reported  net income of $344.5 million on revenue of $1.7 billion for the 12 months that ended Dec. 31, 2024.

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