(Bloomberg) — Hunan Chayue Cultural Industry Development Group Ltd., also known as Sexy Tea, wants to make an initial public offering in the U.S. instead of Hong Kong, according to people familiar with the matter.
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The Chinese tea chain chose China International Capital Corp earlier this year. and Morgan Stanley to work on a share sale in Hong Kong to potentially raise a few hundred million dollars, Bloomberg News reported at the time.
A U.S. initial public offering could now take place next year, although the timing depends on when Sexy Tea receives approval from Chinese regulators, said the people, who asked not to be identified because the information is not public. The U.S. shift comes as a growing number of tea companies consider selling shares in Hong Kong, two of the people said.
A representative for Sexy Tea declined to comment.
Offshore listings of several tea chains including Mixue Group, Guming Holdings and Auntea Jenny stalled after failing to get approval from the China Securities Regulatory Commission, while bubble tea maker Sichuan Baicha Baidao Industrial Co. fell 27% in its Hong Kong debut in April also saw momentum. Nevertheless, the CSRC has now approved Guming’s IPO in Hong Kong.
Chinese regulators issued guidelines earlier this year discouraging certain companies from listing on the domestic A-share market, Bloomberg reported. They also recommended that those who rely on fast-growing franchise business models could not obtain a local listing. Many milk tea chains rely on such models.
Listing requirements abroad are less stringent, including in the US, increasing their attractiveness as a trading platform for Chinese companies.
About $10.5 billion has been raised through initial share sales in Hong Kong this year, a big increase from 2023 but less than many previous years.
Sexy Tea was founded in 2013 in Changsha, Hunan province, and operates a network of teahouses in China, as well as cafes and lemon tea shops, according to its website. Private label products are also sold, such as teaware and stationery.
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