Chinese Milk Tea Chain GoodMe Exploring Hong Kong IPO

Chinese milk tea chain Gu Ming is considering a Hong Kong initial public offering as soon as next year, according to people familiar with the matter.

The Sequoia Capital China-backed company, known as GoodMe in English, has held initial discussions with potential advisers about the listing, the people said, asking not to be identified as the information isn’t public. The offering could raise between $300 million and $500 million, they said.

The company’s plans are preliminary and details of the IPO such as size and timing could change, the people said. A representative for Gu Ming said the company doesn’t have IPO plans at this moment, while a representative for Sequoia China declined to comment.

A number of Chinese tea chains are weighing Hong Kong IPOs after bubble tea chain Nayuki Holdings Ltd. raised $656 million in a June share sale. Mixue Bingcheng Co., which makes ice cream and tea, and fruit tea chain ChaBaiDao are among the companies looking at going public in the Asian financial hub, Bloomberg News has reported.

Nayuki shares have slumped to just over half the IPO price after the chain closed two of its tea shops to investigate reports of hygiene issues. The company said it is committed to food safety and product quality requirements.

Gu Ming opened its first store in 2010 and now runs over 5,000 outlets in China, according to its website. Its investors include Sequoia’s China arm, Dragonball Capital and Coatue Management, according to Pitchbook.

©2021 Bloomberg L.P.

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