The China Securities Regulatory Commission (CSRC) has suspended the offshore stock offering plans of at least three Chinese tea beverage companies, according to media reports.

The sources said the CSRC has postponed the postponement of the offshore listing plans of Mixue Ice Cream & Tea, Gu Ming and Auntea Jenny due to weakening consumer confidence in the country and poor market performance of their Hong Kong counterparts.

Earlier this year, Mixue, Gu Ming and Auntea Jenny filed prospectuses with the Hong Kong stock exchange, with the three major Chinese ready-made tea beverage brands all launching their bid for listing.

According to Mixue's prospectus, it has more than 32,000 stores in China and about 4,000 stores overseas. Mixue is the No. 1 ready-to-drink company in China and No. 2 globally based on the number of stores as of Sept. 30, 2023, and the number of drinks dispensed in the first nine months of 2023, according to a report by Scorch Consulting.

Behind Mixue in terms of number of stores is Guming. According to Guming's prospectus, as of December 31, 2023, Guming's store network had a total of 9,001 stores, an increase of 35.0% from the end of 2022. Currently, Gu Ming is the most promising tea brand to enter the “10,000-store era”.

Auntea Jenny mentioned in its prospectus that according to a report by Scorch Consulting, Auntea Jenny is the fastest-growing ready-made tea beverage store brand among the top five ready-made tea beverage brands in terms of the number of stores and GMV growth rate, based on the number of stores across the system.

Mixue is reportedly planning to raise up to $1 billion in its Hong Kong IPO, while Gu Ming is looking to raise up to $500 million and Auntea Jenny is looking to raise up to $300 million. However, after a six-month wait for approval, all three companies' IPO applications have now lapsed.

Chinese companies seeking to list on Hong Kong or other offshore exchanges must first get approval from their home regulators, according to the China Securities Regulatory Commission (CSRC), which unveiled regulations governing offshore listings in March last year. The CSRC was quoted as saying that it was pushing ahead with the filing of the three tea-drinking companies in accordance with the regulations, and that the next step would be to continue to optimize the filing mechanism for overseas listings, constantly improve the quality and efficiency of the filings, and smooth the pipeline of overseas financing.

Although there are many domestic ready-made tea drink brands in China, so far only two of them, Nayuki and ChaPanda, have been listed in Hong Kong.

Among them, ChaPanda was officially listed on the main board of the Hong Kong Stock Exchange in April this year, raising US$330 million. Unfortunately, ChaPanda's share price dropped by nearly 40% on the first day of listing, and has been decimated to date. And Nayuki's share price has dropped more than 90% since its July 2021 listing.

ChaPanda reported last month that its total revenue for the first half of this year was down 10 percent compared to the same period last year, and gross profit was down 19 percent.

And according to data released by Nayuki, revenue for the first half of 2024 was down 1.9% year-on-year. The company said the decrease in revenue was mainly due to lower revenue from Nayuki's directly operated stores as a result of a weaker-than-expected consumer recovery. In addition, the company recorded a net loss of $438 million in the first half of the year, compared to a profit of $70.2 million in the same period last year.

From the financial reports of the two companies, we can see the weak performance of the tea beverage industry at this stage, which also affects the IPO plans of the proposed companies to a certain extent.

In addition to the industry's weakness, this year's IPO market in Hong Kong has also performed poorly. According to Dealogic's data, Chinese companies raised only $2.56 billion through IPOs in Hong Kong this year, lower than the $5.7 billion raised last year, and far lower than the $22.1 billion record set in 2021.