Chagee Holdings Limited Announces Exercise and Closing of Underwriters’ Option to Purchase Additional American Depositary Shares

Rhea-AI Summary

Chagee Holdings Limited (NASDAQ:CHA), a premium tea drinks brand, announced that underwriters have exercised their over-allotment option for its U.S. IPO. The underwriters purchased an additional 2,202,598 American Depositary Shares (ADSs) at $28.00 per ADS, generating extra gross proceeds of approximately $61.7 million. Each ADS represents one Class A ordinary share, and the over-allotment transaction closed on April 30, 2025.

The IPO was led by major underwriters including Citigroup Global Markets, Morgan Stanley Asia, and Deutsche Bank AG, along with other financial institutions. The company's registration statement on Form F-1 was declared effective on April 16, 2025.

Positive

• Additional capital raise of $61.7 million through over-allotment exercise indicates strong investor demand
• Successful IPO backed by prestigious underwriters including Citigroup, Morgan Stanley, and Deutsche Bank
• Full exercise of over-allotment option suggests market confidence in the company

Negative

• Additional share issuance may lead to dilution for existing shareholders

Insights

Financial Markets Analyst

Chagee's IPO underwriters fully exercised their over-allotment option, raising an additional $61.7M, signaling strong market demand for the company's shares.

The complete exercise of the over-allotment option by Chagee's underwriters represents a significant positive signal about the company's initial public offering reception. Underwriters purchased an additional 2,202,598 ADSs at the original IPO price of $28.00, generating approximately $61.7 million in additional gross proceeds before deducting underwriting discounts and commissions.

This development, commonly known as exercising the "greenshoe option," indicates strong demand for Chagee's shares during the IPO process. Underwriters typically exercise this option when investor interest exceeds the initial offering allocation and shares are trading well in the secondary market.

The caliber of the underwriting syndicate is notable, with global financial institutions including Citigroup, Morgan Stanley, and Deutsche Bank serving as representatives. This prestigious banking group adds credibility to Chagee's market debut.

For Chagee, a premium tea drinks brand, this additional capital infusion strengthens its financial position as it begins life as a public company. The successful completion of both the initial offering and the over-allotment option suggests investor confidence in the company's business model and growth prospects in the premium beverage sector.

The fact that underwriters were willing to purchase additional shares at the full IPO price rather than at a discount further validates the original pricing of the offering at $28.00 per ADS. This successful capital raise provides Chagee with enhanced financial flexibility as it transitions to operating in the public markets.

SHANGHAI, May 01, 2025 (GLOBE NEWSWIRE) -- Chagee Holdings Limited (NASDAQ:CHA) (“Chagee” or the “Company”), a leading premium tea drinks brand serving healthy and delicious freshly-made tea drinks, today announced the Underwriters of its previously announced U.S. initial public offering (the “Offering”) have exercised their over-allotment option to purchase an additional 2,202,598 American Depositary Shares (“ADSs”) at an initial public offering price of US$28.00 per ADS, resulting in additional gross proceeds of approximately US$61.7 million, before underwriting discounts and commissions. Each ADS represents one Class A ordinary share of Chagee. The issuance and sale of the over-allotment option closed on April 30, 2025.

Citigroup Global Markets Inc., Morgan Stanley Asia Limited, and Deutsche Bank AG, Hong Kong Branch acted as the representatives of the underwriters for the transaction, with China International Capital Corporation Hong Kong Securities Limited, Tiger Brokers (NZ) Limited, Moomoo Financial Inc., and Valuable Capital Limited serving as underwriters (collectively, the "Underwriters").

The Company's registration statement on Form F-1 relating to the Offering has been filed with the U.S. Securities and Exchange Commission and was declared effective on April 16, 2025. This Offering has been made only by means of a prospectus forming a part of the effective registration statement. A copy of the final prospectus relating to the Offering may be obtained, when available, by contacting Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, United States of America, by telephone at +1-800-831-9146 or by e-mailing prospectus@citi.com; Morgan Stanley Asia Limited, c/o Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, United States, by telephone at +1-866-718-1649 or by e-mailing prospectus@morganstanley.com; Deutsche Bank AG, Hong Kong Branch at 60/F, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong, or by telephone at +852-2203-8166 or by e-mailing asia.ecm.internal@list.db.com; China International Capital Corporation Hong Kong Securities Limited at 29/F, One International Finance Center, 1 Harbor View Street, Central, Hong Kong, or by telephone at +852-2872-2000 or by e-mailing ib_projecth2024@cicc.com.cn; Tiger Brokers (NZ) Limited at Level 27, 151 Queen Street, Auckland Central, New Zealand, 1010, or by telephone at +64-09-3938128 or by e-mailing vincent.c@tigerfintech.com; Moomoo Financial Inc. at 185 Hudson ST, 5 Harborside, Suite 2603, Jersey City, NJ 07311, USA, or by telephone at +1-888-721-0610 or by e-mailing IPO@us.moomoo.com; and Valuable Capital Limited at RM 3601-06 & 3617-19, 36/F, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong, or by telephone at +852-2500-0343 or by e-mailing leo.xiao@valuable.com.hk.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.

About Chagee Holdings Limited

Chagee is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks. Founded in 2017, Chagee has transformed traditional tea culture into a modern lifestyle experience, leveraging cutting-edge technology and innovative branding. With its commitment to quality, innovation, and cultural connection, Chagee continues to reshape the global tea industry.

Contact

Investor Relations
Robin Yang, Partner
ICR, LLC
Email: Chagee.IR@icrinc.com 
Phone: +1 (212) 537-5825

FAQ

How much additional capital did Chagee Holdings (CHA) raise through the over-allotment option?

Chagee Holdings raised approximately $61.7 million in additional gross proceeds through the over-allotment option, with underwriters purchasing 2,202,598 ADSs at $28.00 per ADS.

When did Chagee Holdings (CHA) close its over-allotment option exercise?

Chagee Holdings closed the issuance and sale of the over-allotment option on April 30, 2025.

Who were the lead underwriters for Chagee Holdings' (CHA) IPO?

The lead underwriters were Citigroup Global Markets Inc., Morgan Stanley Asia Limited, and Deutsche Bank AG, Hong Kong Branch.

What is the ADS to share ratio for Chagee Holdings (CHA)?

Each ADS represents one Class A ordinary share of Chagee Holdings.

When was Chagee Holdings' (CHA) registration statement declared effective?

The company's registration statement on Form F-1 was declared effective on April 16, 2025.