Just a week after we predicted that China was lifting its ban on new bubble tea IPOs, it’s official. That’s the key takeaway from Guming Holdings Ltd.’s filing of an updated listing document with the Hong Kong Stock Exchange on Monday, just a week after the Chinese securities regulator signaled the listing could proceed after a nearly yearlong delay.
The latest filing from Guming, which uses the English name “Good me” on its thousands of tea shops around China, contains a year of fresh financial data from the company since its last filing in January. Much has changed since then, including intensifying competition as Guming and its rivals continue to open new stores at a rapid pace, even as the market shows growing signs of oversaturation.
At the same time, Chinese consumers are becoming increasingly cautious as the nation’s economy slows after years of breakneck growth. That’s hitting high-end bubble tea makers like Heytea and Nayuki (2150.HK) the most, though mid-range companies like Guming and rival Chabaidao (2555.HK) are also feeling the pinch.