Bubble tea maker Ten Ren’s parent company B&S International Holdings’ stocks surged 298 percent in its debut on the Hong Kong IPO market last week, making it the city’s strongest mainboard debut in two years. Initial shares sold for HK$1 and closed at HK$3.98, earning kudos for the company as the most oversubscribed among 51 Hong Kong IPOs this year and the second-highest ever. Hong Kong IPOs are sizzling in 2018: the initial retail portion of an average offering has been 225 times subscribed this year, more than double the level in 2017, data compiled by Bloomberg show.
By the second day, B&S International’s share prices had soared even higher, to an impressive HK$7.9 a share.
The company plans to use about two-thirds of the HK$100m it raised through its IPO to open new retail outlets in the densely populated territory under both its Ten Ren Tea brand and its Jiu Tang Wu ramen shops, as well as the first of a planned network of Japanese cheesecake restaurants called Uncle Tetsu.
B&S International operates 32 Ten Ren outlets in Hong Kong, where the thirst for bubble tea is seemingly unquenchable. The chain was the territory’s top-selling tea drinks brand by revenue between November 1, 2016 and October 31, 2017, with a market share of 24.3 percent, according to Inside Retail Hong Kong.
Originally a staple of the night markets of Taiwan, bubble tea offers instant gratification with its fun colors and tongue-tingling tapioca balls and fruit flavors—especially popular with the Millennial and Gen Z crowd. It is based on black or green tea, and variations span the gamut of healthy and health-warningly sweet. Globally, bubble tea or boba’s popularity is booming and Ten Ren is leading that charge, with stores in Taiwan, Japan, Singapore, Malaysia, Australia, the U.S., and Canada.