BRIEF: Guming slumps in Hong Kong debut after raising $220 million

Shares of  bubble tea seller Guming Holdings Ltd. (1364.HK) opened up 0.6% in their Hong Kong trading debut on Wednesday, but later reversed course as demand weakened.  Shares were sold in lots of 400, yielding a modest paper gain of HK$24 per lot for IPO investors who sold at the opening price. The stock later gave back that modest gain and close at HK$9.3 down 6.4%.

Guming announced the local portion of its offering was 195 oversubscribed. Since demand for the international portion of the offering was less strong, oversubscribed by 15 times, the Hong Kong portion increased to 79 million shares, or about 43% of the total offering, up from the typical 10%. The final offer price of HK$9.94 represented the upper end of the pricing range, with a total of 182 million shares issued, raising net proceeds of HK$1.72 billion ($220 million).

Guming primarily sells premium tea-based drinks and uses the English name “Good me” at its shops across China. At the end of September last year, it operated 9,778 stores nationwide, with 80% in second-tier and smaller cities. In the first nine months of 2024, Guming’s revenue grew to 6.44 billion yuan, up 15.6% year-on-year, while same-store gross merchandise value (GMV) declined by 4.3% year-on-year.

By Lee Shih Ta

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