(Yicai) April 18 -- Chagee Holdings' stock price surged 16 percent on its first trading day, after the milk and fruit tea chain raised USD411 million through its initial public offering -- becoming the first of its kind from China to list in the United States.

Premium tea brand Chagee [NASDAQ: CHA] closed at USD32.44 on the Nasdaq yesterday, up 16 percent from its IPO price of USD28. The stock soared as much as 49 percent intraday. Chagee's market capitalization now stands at around USD6 billion.

"This is just the beginning," said Zhang Junjie, founder and chairman of Chagee, at the bell-ringing ceremony. "Since founding Chagee in 2017, we envisioned creating a global brand." "We will continue to promote healthy lifestyle choices, drive industry innovation, and fulfill our mission of Creating Connections Every Day With Tea.”

The Shanghai-headquartered retailer plans to use the IPO proceeds to expand its teahouse network both in China and overseas, develop new products, build a global supply chain, and invest in technologies to support business growth and operations, according to its prospectus.

As of December last year, Chagee operated 6,440 stores -- an 83 percent increase year-on-year. More than 150 of those stores are located in international markets, including Malaysia, Thailand, Singapore, and Indonesia. The company also announced that its first North American store will soon open in Los Angeles.

Chagee’s business has grown rapidly over the past three years. After turning a profit for the first time in 2023, the company saw its net income more than triple to CNY2.5 billion (USD344.5 million), while revenue nearly tripled to CNY12.4 billion (USD1.7 billion), per the prospectus.

China’s tea beverage market is becoming increasingly competitive with a growing list of publicly listed players. Before Chagee’s IPO, four other major tea brands -- Nayuki Holdings, Baicha Baidao Industrial, Guming Holdings, and Mixue Group -- had already gone public in Hong Kong, with Mixue completing its listing just last month.

Among them, Nayuki is seen as a key competitor to Chagee, targeting the high-end tea segment with drinks priced above CNY20 (USD2.70). Baidao’s ChaPanda and Guming’s Good Me cater to the mid-range market, offering products priced between CNY10 and CNY20. Ice cream and bubble tea seller Mixue, on the other hand, serves the value segment with most items under CNY10.

Editor: Emmi Laine