On the first day of listing, Nayuki (also known as Naixue's Tea) opened 4.75% lower than the issue price, at HKD 18.86, and the largest intraday drop expanded to 11%.
As of press time, the total market value of Nayuki's Tea has fallen to HKD 30.34 billion from 32.3 billion.
Nayuki's Tea has completed a total of five rounds of funding ahead of the IPO. On June 21, it received its most recent strategic financing of CNY 4.87 billion with China Southern Fund, UBS Fund, China Guangfa Fund and CCB International as joint investors.
In recent years, the Chinese tea market has been growing rapidly. According to CBNData, China's new tea market is expected to exceed CNY 110 billion in 2021. The number of consumers of new tea drinks has hit 340 million high. At the same time, it is a competitive market, the survival rate of the industry is relatively low. As of November 30, 2020, there were over 300,000 Chinese 'New Tea' drinking stores, of which more than 130,000 were closed, liquidated, revoked, or de-registered, accounting for up to 43%.
From 2018 to 2020, the total revenue of Nayuki was CNY 1.09 billion, CNY 2.5 billion and CNY 3.06 billion respectively, of which the net loss was CNY 70 million, CNY 40 million and CNY 203 million, respectively. According to the prospectus, the main reason for the loss is the continuous expansion of business scale and tea shop network, which requires a large amount of funds to operate and deal with potential business opportunities.
Funded in 2015, the Shenzhen-headquartered company has 489 stores over 66 cities in China. The prospectus shows that, in terms of total retail consumption in 2020, Nayuki's tea is the second largest tea shop platform in China's 'New Tea' or high-end ready-made tea shop market, with a market share of 18.9%, second only to HeyTea (喜茶).