Chinese restaurant operator Green Tea Group Limited, backed by Swiss private equity (PE) firm Partners Group, marked its debut on the main board of the Hong Kong stock exchange on Friday following its oversubscribed initial public offering (IPO).
Shares of Green Tea Group opened flat at HK$7.19 ($0.92) apiece, the same as its offer price, before turning south in early trading to an intraday low of HK$6.69 ($0.86).
Post-IPO and before the exercise of any over-allotment option, Partners Group owns about 15.76% of the company.
Stock market investors have shown continued interest in consumer sector IPOs in Hong Kong, with Green Tea Group’s public issue oversubscribed 317 times, according to a company announcement late Thursday. This, however, pales in comparison with the IPOs of Chinese bubble-tea chains Auntea Jenny and Mixue Group, which were oversubscribed 3,616 and 5,258 times, respectively.
The Hangzhou-based budget dining restaurant chain finally pulled off this first-time public share sale in what was its fifth attempt in four years to go public in Hong Kong.
Green Tea Group filed its Hong Kong listing application for the first time in March 2021. It submitted the most recent application in December 2024, ahead of a Hong Kong IPO market revival that saw 15 companies raise HK$17.7 billion ($2.3 billion) in the city in the first quarter of this year. The overall IPO funds raised in Q1 was nearly triple the amount raised a year earlier, according to KPMG.
The Hong Kong listing of Green Tea Group gave the founding couple Wang Qinsong and Lu Changmei, who owned a combined 65.8% stake right before the listing, a combined net worth of over HK$3 billion ($384 million).
Since the opening of the first Green Tea restaurant in 2008 by the West Lake in Hangzhou, Green Tea Group has built a network of 493 restaurants across Greater China, representing a minuscule 0.7% share of the highly-fragmented casual cuisine restaurant market.
Its restaurants feature decoration inspired by Chinese traditional culture and menus of fusion cuisine at accessible price points averaging RMB50-RMB100 ($7.8-$13.9) per customer.
Green Tea Group plans to use most of the IPO proceeds to further grow its restaurant network. Additionally, it will invest in centralised food processing facilities and information technology systems.
Partners Group, whose private equity business has $78 billion in assets under management (AUM) globally, invested over $75 million in Green Tea Group for an approximately 30% stake in May 2017. At the time, the restaurant operator was valued at about $233 million.
Overall, Partners Group manages over $150 billion AUM across PE, private credit, infrastructure, real estate, and royalties.
