(Yicai Global) Nov. 4 -- Shares in Nayuki Holdings surged as much as 8.1 percent today after a subsidiary of the Chinese bubble tea chain, which operated at a loss in the first half, recently expanded its business scope to include movie screening, according to publicly available business data.

Nayuki’s share price [HKG:2150] was trading up 6.4 percent at HKD4.98 (USD0.63) as of 12 noon China time. Earlier in the day it hit HKD5.06. The firm was China’s first modern tea chain to go public when it listed in Hong Kong in June last year, but the stock has lost 37 percent of its value so far this year.

Nayuki is moving into a new commercial activity which involves showing movies, a company insider told Yicai Global yesterday. Although the person did not divulge more details, he added that the new business has nothing to do with film.

Shenzhen Nayuki Commercial Culture Management, which was set up by Nayuki’s operator Shenzhen Pindao Food and Beverage Management in December last year, engages in commercial complex management services, investment activities using its own funds, restaurant management and liquor operations, according to corporate data platform Tianyancha.

A new source of revenue will be a big boon for Nayuki. The Shenzhen-based company issued a profit warning in September as losses started to mount during the Covid-19 flare-ups on falling consumer spending but greater expenditure on staff and rents as the tea chain continues to expand. The firm added 87 new shops in the first six months, bringing the total number of self-operated outlets to 904 across 85 cities. More stores are needed to attract more customers, it said.

Nayuki racked up losses of CNY249 million (USD34.1 million) in the first half, a big turn around from profit of CNY48.2 million a year earlier, according to its latest earnings report. Revenue dipped 3.8 percent to CNY2 billion (USD274.1 million).

Editor: Kim Taylor