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Mixue, Guming and Auntea sought IPO approvals earlier this

year

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Regulatory caution stems from poor performance of listed

peers-sources

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Chabaidao dropped nearly 27% on Hong Kong debut in April

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Move highlights tighter scrutiny of offshore Chinese IPOs

By Julie Zhu, Scott Murdoch and Kane Wu

HONG KONG/SYDNEY, Sept 20 (Reuters) - Offshore share

offering plans of at least three Chinese bubble tea makers have

been put on hold by the securities regulator due to the dour

market performance of peers in Hong Kong amid weaker consumer

sentiment at home, said eight sources.

Mixue Bingcheng, Guming Holdings and Auntea Jenny are among

those whose offshore floating plans have been delayed by the

China Securities Regulatory Commission (CSRC) this year, said

the sources with knowledge of the matter.

Mixue, which has roughly 36,000 stores, was looking to raise

up to $1 billion in its Hong Kong IPO, which would have been the

largest new share sale in at least a year in the city, said five

of the sources.

Guming, with 9,000 stores, aimed to raise up to $500 million

via an Hong Kong listing, said two of them. But both Mixue and

Guming IPO applications lapsed earlier this year after six

months of waiting for the approval, said four of the sources.

As part of rules unveiled by the CSRC in March last year to

strengthen oversight of offshore listings, Chinese companies

looking to list in Hong Kong or New York must first get approval

from their home regulator.

The regulatory move to put the bubble tea makers' IPO plans

on hold has been triggered by the nearly 27% Hong Kong debut-day

slump in shares of Sichuan Baicha Baidao Industrial,

the Chinese tea chain known as Chabaidao, said the sources.

Chabaidao, which raised $330 million in April, has since

fallen 70% from its HK$17.5 per share IPO price.

In response to a Reuters request for comment, the CSRC said

that it was advancing the filing work of the three tea beverage

companies in accordance with regulations.

"Next, we will continue to optimize the filing mechanism for

offshore listings, continuously improve the quality and

efficiency of filing, and keep offshore financing channels

open."

All the sources declined to be named as they were not

authorised to speak to the media.

Mixue declined to comment. Guming and Auntea Jenny did not

respond to a request for comment.

The cautious stance of the regulator underscores the tighter

scrutiny of the offshore IPO hopefuls in China, reducing the

number of deals in Hong Kong or New York and stymieing Chinese

companies' aim to tap the capital market for fundraising.

Chinese companies have raised just $2.56 billion via IPOs in

Hong Kong this year, versus $5.7 billion in the whole of last

year, according to Dealogic data. The total haul this year is

far below the $22.1 billion year-to-date record set in 2021.

REGULATORY CAUTION

The regulatory caution towards offshore share offerings by

the bubble tea makers stems from low product differentiation and

fierce competition in the sector at a time when consumers

tighten their belts in a slowing economy.

Highlighting the tea sector's weak performance, Chabaidao

last month reported a 10% drop in gross revenue and 19% fall in

gross profit in the first half of this year compared to a

year-ago period.

Shares in Hong Kong-listed Nayuki ( NYKHF ), China's only

publicly traded bubble tea chain before Chabaidao, have dropped

more than 90% since their debut in 2021, when it raised $330

million.

The bubble tea makers are not the only ones to take a hit

from the heightened regulatory caution -- Beijing has toughened

rules for firms seeking funds offshore, and currently has more

than 110 offshore listing hopefuls await its approvals.

Mixue and Guming, China's largest and second-largest bubble

tea chains by store count as of 2023, submitted applications for

their IPOs in Hong Kong in January, Hong Kong Stock Exchange

filings showed.

Both companies were planning to file again after updating

financial information for the first half, two of the eight

sources and another person with knowledge of the matter said.

However, they have yet to do that.

In February, fruit tea chain Auntea Jenny filed for approval

to raise up to $300 million via an Hong Kong IPO, according to

two sources. Its application has also lapsed but the company

plans to refile again, one of the sources said.