Guming Holdings Limited (stock code: 01364.HK) is set to list on the Hong Kong Stock Exchange on February 12, 2025.

IPO Details:

Purpose of IPO: The specific allocation of the IPO proceeds has not been detailed in the available sources.

Total Offer Shares: 158,612,000 shares.

Public Offer Shares: 15,861,200 shares (10% of the total).

Placing Shares: 142,750,800 shares (90% of the total).

Offer Price Range: HK$8.68 to HK$9.94 per share.

Market Capitalization: Based on the offer price range, the expected market capitalization is between HK$1.38 billion and HK$1.58 billion.

The performance of the IPO on its first trading day will depend on various factors, including market conditions, investor sentiment, and demand for the shares.

The joint sponsors, overall coordinators, joint global coordinators, joint bookrunners, and joint lead managers for the IPO are:

Goldman Sachs (Asia) L.L.C.

China International Capital Corporation Hong Kong Securities Limited

China Securities (International) Corporate Finance Company Limited

Haitong International Securities Company Limited

Huatai Financial Holdings (Hong Kong) Limited

ICBC International Securities Limited

The involvement of these prominent financial institutions may positively influence the IPO’s performance on its debut.

Company Overview:

Guming Holdings Limited operates in the bubble tea industry, a sector that has experienced significant growth in recent years. However, the market has become increasingly saturated, leading to intense competition.

Guming operates approximately 9,000 stores, making it one of China’s largest bubble tea chains. Despite its extensive network, the company faces stiff competition from other major players in the market.

The bubble tea industry has seen rapid expansion, but recent market performances indicate potential challenges. For instance, Chabaidao, a Chinese tea chain, experienced a nearly 27% drop in its share price on its Hong Kong debut, highlighting potential market saturation and shifting consumer preferences.

Guming’s IPO comes at a time when the market is cautious due to recent underperformances of similar companies.

The broader economic environment is characterized by slowing growth and cautious consumer spending, which could impact discretionary sectors like bubble tea.

Given the recent performance of similar IPOs and regulatory interventions, market conditions appear challenging for new listings in the bubble tea sector.

The bubble tea market is highly competitive, with low product differentiation. Economic slowdowns can lead to reduced consumer spending on discretionary items like bubble tea. Additionally, regulatory scrutiny has increased, as evidenced by the CSRC’s recent actions.

Recent performances of sector peers, such as Chabaidao’s significant share price decline, indicate potential challenges for new entrants.

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