Shenzhen News (Shenzhen)—Naiyuki Holdings Limited is seeking to raise HK$5.1 billion (US$657 million) from an initial public offering in Hong Kong.

The Shenzhen-based company is selling 257 million new shares at HK$17.20 to HK$19.80 ($2.22 to $2.55) apiece, according to its prospectus filed with the Hong Kong Stock exchange. The company plans to price the offering on 23 March, and then list on the exchange on 30 June.

According to the filing, 10% of the shares would be sold in Hong Kong and 90% globally. The company has an option to sell as much as 15% more shares in oversubscription. The share sale attracts five cornerstone investors agreeing to subscribe a total of US$155 million in stock or 25% of the offering, based on the mid-point of the price range. They are UBS Global Asset Management, China Universal Asset Management Co Ltd, GF Fund Management, China Southern Asset Management Co Ltd and CCB International (Holdings) Ltd.

JPMorgan, CMB International Capital Corp and Huatai International Financial Holdings Ltd are co-sponsors of the deal.

The company plans to use 70% of the proceeds to open new stores in the next three years, 10% to enhance technical capabilities such as digitisation of operations, 10% to enhance supply chain and channel building capabilities, and the rest for working capital and general business purposes. The company plans to open 650 new stores by 2022, more than doubling its 556 outlets in 70 Chinese cities as of the end of May, according to the prospectus.

Founded in 2015, Naiyuki has more than 422 stores across 51 cities in China. It is the first unicorn in China’s tea chain sector. It generated revenue of CN¥3 billion (US$465 million) and a net loss of CN¥203 million (US$31.5 million) in 2020.

The company says it accounts for 18.9% of China’s premium freshly made tea beverage market, ranking second behind HeyTea, which is reportedly seeking to raise US$400 million to US$500 million in an IPO in Hong Kong before the end of 2021.

Naiyuki raised a Series C funding of over US$100 million in December to bring the company’s value to nearly US$2 billion.

Shenzhen News (Shenzhen)—Shenzhen Pindao Restaurant Management, owner of tea chain Nayuki, has completed a Series C funding around of over US$100 million to bring the company value at almost US$2 billion.

The latest funding round is said to be led by private equity firm PAG with Jack Ma’s Yunfeng Capital among the investors.

Nayuki is said to be considering an IPO in Hong Kong, after the coronavirus pandemic stalled its plans following is reported filing of an offering in the US last February. This comes as Heytea, another major tea chain in China, is reported to be planning for an IPO in Hong Kong in 2021.

The company will invest the funds on product research and supply chain digitalisation.

Founded in 2015, Shenzhen-based Naiyuki has more than 350 stores across 51 cities in China. It is the first unicorn in China’s tea chain sector.