Hunan Chayue Cultural Industry Development Group, also known as Sexy Tea, has selected banks for a Hong Kong initial public offering, which could take place as soon as this year, according to people familiar with the matter.
China International Capital Corp and Morgan Stanley are working on the potential listing, the people said, asking not to be identified as the information is private. The Chinese teahouse chain may raise a few hundred million dollars via the share sale, though the ultimate size will depend on market sentiment, the people said.
Deliberations are ongoing and details of the IPO including bank lineup and timeline may change, the people said. A representative for Morgan Stanley declined to comment, while representatives for CICC and Sexy Tea didn’t respond to requests for comment.
China’s food and beverage sector, particularly targeting the middle class and the younger generation, has been expanding quickly despite a slowdown in the world’s second-largest economy. The industry has also been reportedly among those discouraged from listing in China’s main exchanges since last year.
Started in Changsha, Hunan province in 2013, Sexy Tea runs a network of new-style teahouses in China and has recently expanded into cafes and lemon tea shops, according to its website. It also sells house brand products such as tea utensils and stationary. As of October 2023, Sexy Tea operates more than 500 stores.
