The Shanghai-based firm made its trading debut in Hong Kong on Thursday, raising HK$273 million (US$35 million) by offering 2.4 million shares at HK$113.12 apiece, the top end of its pricing range. The stock surged at the open and ended the morning session up 52.8% at HK$172.80, as reported by the South China Morning Post.
The IPO catapulted Shan and his wife to billionaire status, with their wealth stemming entirely from their stake in Auntea, according to the Bloomberg Billionaires Index.
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A cup of bubble tea from Auntea Jenny. Photo from Instagram |
The couple are among a growing number of Chinese entrepreneurs riding the freshly brewed tea boom, such as those behind the Chagee and Mixue tea chains.
Chagee went public on the Nasdaq last month, making its 30-year-old founder, Junjie Zhang, a billionaire with a net worth of $2.1 billion.
Similarly, the two brothers behind low-cost bubble tea, coffee, and ice cream chain Mixue have garnered a combined $8 billion in wealth since the firm’s Hong Kong IPO earlier this year.
Before striking it rich with the popular beverage, Shan and Zhou, both 48, were senior sales managers at Amway (China), a healthcare products retailer, according to Bloomberg.
They launched their first Auntea Jenny store in Shanghai in 2013, inspired by tea brands they saw during a Taiwan trip earlier that same year. The shop offers tea with glutinous rice, fruit teas, yogurt shakes, and snack boxes.
It has since grown into China’s fourth-largest freshly made tea chain, with over 9,100 outlets in more than 300 cities by the end of last year, nearly all operated by franchisees.
Overseas, it runs 30 stores in Malaysia and aims to grow that number to 100 this year. It also plans to open its first flagship store in New York next week and eventually expand to Australia, South Korea and Europe.
Pricing a typical drink at around $2, Auntea Jenny, like Mixue, has built its network largely by focusing on fast-growing and economically less developed areas, often called “lower-tier cities” in China, with around half of its stores located in such places. Most of its stores are located on the street, with only a few outlets in shopping malls and train stations.
However, the firm has been facing challenges due to intensifying competition. Last year, it reported a 2% dip in revenue to 3.3 billion yuan (US$453 million) while net profit fell 15% to 329 million yuan.
Auntea plans to use the proceeds from the IPO to improve its digital systems, supply chain and ingredient quality, as well as to grow its store network.
“The listing is not merely a new starting point for [our] development, but also the beginning of an existential journey to fulfil our mission,” Shan, who serves as the chain’s chairman, said during the listing ceremony.
“It is not only a strong affirmation of past struggles, but also a solemn commitment to the future.”
