It was 2014 when Peng Xin and her husband Zhao Lin pledged their home as collateral for a bank loan to get their fledgling bubble tea business off the ground. The bubble tea is a non-alcoholic iced tea and milk flavored with syrups to which balls of fruit jelly or cream are added. Bubble tea was created in Taiwan in the 1980s and subsequently became popular elsewhere in Asia and quickly became the most popular street sipping drink.
The impressive rise of Nayuki
Today, the company the couple founded, the Nayuki Holdings Ltd, is worth more than $ 4 billion after the shares debuted in Hong Kong, and the pair’s holdings are each worth around $ 1.2 billion, according to the Bloomberg Billionaires Index. “It wasn’t a rash decision,” Peng, the company’s executive director and general manager, said in an interview. “We spent nearly two years testing our drinks on the street before opening our first store.”
Nayuki started by opening three stores in the southern Chinese city of Shenzhen, riding a boom in the high-end tea beverage market that has seen it subsequently expand to more than 560 stores in more than 70 cities, mostly in China. But some analysts have expressed concern if the firm, still at a loss, will be able to transform and remain profitable.
“Our family and friends were worried about us at the time,” Peng recalled, referring to how they pledged their home as collateral for the bank loan. “But we and our team believed in our choice”. The company aims to open another 300 branches this year and 350 more in 2022, Peng said. Nayuki has launched a new drink every week since last year to keep younger customers. But it was the pandemic that boosted its sales. “After the pandemic, 70% of our orders come from online platforms,” Peng said. “Customers came to our stores in groups of three or four to get together and share food, but now we find many of them just ordering a drink online when they feel like it.”
Last year, the company reported sales of approximately 3.1 billion yuan ($ 480 million) and a net loss of approximately 203 million yuan. China’s tea cafe market will continue to enjoy “decent growth potential,” but whether Nayuki and other companies in the industry achieve sustainable profitability is cause for concern, according to Jason Yu, general manager of research firm Kantar Worldpanel Greater China. “Modernizing the entire supply chain to drive more efficiency remains the key challenge for Nayuki and her peers,” Yu said.
IPO with record demand among retail investors
Nayuki shares debuted today at HK $ 18.86, before falling as low as HK $ 17.30, down 13% from the offer price of HK $ 19.8 per share, at the top of the range.IPO that raised 656 million dollars and the retail share was subscribed 432 times, forcing the offer to be closed early.
Ipo of Nayuki confirming the desire for an IPO record. Asian companies have raised $ 82 billion through initial public offerings so far this year, the highest figure ever recorded in the first half, beating the previous record of $ 63 billion in a comparable period in 2010, according to data compiled by Bloomberg.