Chagee plans U.S. IPO as Chinese tea chain seeks global expansion

In a significant move for the beverage market, Chinese tea chain Chagee announced its intentions to file for an initial public offering (IPO) in the United States, seeking to trade on the Nasdaq under the ticker symbol 'CHA.' This filing occurred on Tuesday as Chagee prepares to launch its first store in the U.S., located in the Westfield Century City mall in Los Angeles, set to open in the spring of 2025. Founded in 2017, Chagee has achieved remarkable growth, boasting over 6,400 teahouses across various countries, including China, Malaysia, Singapore, and Thailand. As of December 31, a significant majority, approximately 97%, of its locations are situated in China. The company's financial performance in 2024 was impressive, reporting a net income of $344.5 million from revenue totaling $1.7 billion, striking a strong profit margin that indicates its robust market position. Junjie Zhang, the founder and CEO of Chagee, aimed to revolutionize tea consumption and draw inspiration from the widespread success of international coffee brands like Starbucks. Recognizing that China is Starbucks' second-largest market, Chagee sees an opportunity to tap into the growing market for premium tea and establish a significant presence globally. Looking to the future, the chain has ambitious goals that include serving tea enthusiasts in 100 countries and creating more than 300,000 job opportunities worldwide. Their target is to deliver 15 billion cups of freshly brewed tea annually, reflecting a commitment to substantial growth and market penetration. However, the path to a successful IPO might not be smooth, given the cautious sentiment surrounding Chinese companies seeking listings in the U.S., especially in light of previous scandals like that of Luckin Coffee, which faced significant challenges after inflated sales led to its delisting from Nasdaq in 2020.