On April 17, 2025, CHAGEE (stock ticker "CHA") listed on the Nasdaq by ringing the opening bell. It raised $411 million at an offering price of $28 per share, becoming the "first Chinese new tea beverage company to list on the U.S. stock market via IPO". Its strong first-day performance, with a 20.54% opening gain and a 15.86% closing gain, verified the rationality of the pricing. Taking CHAGEE as an example, this article breaks down the entire process of IPO price formation, and reveals the core logic behind "valuation anchoring - market game - dynamic adjustment". The offering price was $28 (at the upper limit of the pricing range of $26-$28). The company issued 14,683,991 ADS shares, raising a total of $411 million, with a market capitalization of $5.1 billion (about 36 billion yuan) on the first day of listing. The opening price was $33.75 (up 20.54%), the intraday high hit $41.8 (up 50%), and the closing price was $32.44 (up 15.86%). The first-day gain fell within the reasonable range of U.S. stock IPOs (usually 10%-30%), which not only avoided the risk of underpricing leading to a post-listing drop, but also left sufficient profit space for investors. In 2024, the company achieved revenue of 12.405 billion yuan (a year-on-year growth of 50%), net profit of 2.515 billion yuan (a year-on-year growth of 100%), with a net profit margin as high as 20% (far exceeding the industry average of 5%-10%). The number of stores increased from 3,511 in 2023 to 6,440 in 2024, and its strong growth momentum provided a solid backing for valuation. CHAGEE and its joint underwriters (Citigroup, Morgan Stanley, China International Capital Corporation (CICC), Deutsche Bank) adopted a "multi-method cross-validation" model to avoid single valuation bias, as detailed below: Core conclusion: Based on various methods, the initial valuation range was set at $5 billion to $6.5 billion, laying a foundation for the subsequent price range determination. The underwriters and CHAGEE's management formed a joint pricing committee, and finally determined the initial price range of $26-$28 (corresponding to a valuation of $5.2 billion). The underlying logic includes three points: 1. Raising safety cushion: The lower limit of $26 corresponds to a fundraising of $382 million, which can fully meet the capital needs for overseas store expansion (plans to open 1,000-1,500 stores in 2025) and supply chain construction; 2. Secondary market space: The upper limit of $28 corresponds to a P/E ratio of 15 times, which is lower than the industry average, avoiding overpricing that would lead to a post-listing drop, while leaving room for first-day gains; 3. Range width control: A narrow range of only $2 (width of 7.7%) was chosen, sending a signal of "high valuation certainty" to strengthen investor confidence. Generally speaking, enterprises that are confident in their valuation will choose a narrower price range. This range needs to be reported to the U.S. Securities and Exchange Commission (SEC) and disclosed in the prospectus, becoming the pricing basis during the roadshow phase. In early April 2025, CHAGEE launched a 10-day global roadshow covering New York, Boston, London, Hong Kong, Singapore and Shanghai, led by CEO Zhang Junjie. The core goals were "collecting orders and verifying valuation". Business model: Emphasized the dual engines of "digital supply chain (inventory turnover rate 30% faster than the industry average) + global expansion (156 overseas stores, with plans to enter North America)"; Financial highlights: 20% net profit margin and abundant cash flow (operating cash flow of 1.8 billion yuan in 2024), proving the sustainability of profitability; Risk response: In response to the question of "fierce competition in the new tea beverage industry", it proposed the strategies of "product innovation (launching more than 10 new products annually) + regional market penetration (filling the blank in third- and fourth-tier cities)". The total order volume reached 5 times the number of issued shares, showing an oversubscribed state and strong market demand; 70% of the orders were concentrated at the upper limit price of $28, and 80% came from institutional investors (such as CDH Investments, RWC, Allianz, etc.), with high-quality institutional investors accounting for more than 50% (committed to subscribing for $205 million); Geographically balanced distribution: U.S. institutions valued the potential of "Chinese consumption upgrade", while Asian institutions recognized the "prospects of new tea beverage going global", with no obvious regional demand shortfalls. On the day before listing (April 16, 2025), the underwriters held a bookbuilding analysis meeting at their New York headquarters, connecting with CHAGEE's executives via video, and finally finalized the offering price. The decision considerations were as follows: Final result: The offering price was set at $28 (the upper limit of the range), with 14,683,991 ADS shares issued, raising $411 million. Cornerstone investors were allocated 52% of the shares, which ensured the success of the offering and stabilized the post-listing stock price. Opening at $33.75 (up 20.54%): Reflecting the concentrated release of backlogged demand during the roadshow, proving that the $28 offering price did not fully overdraw the valuation; Intraday high of $41.8 (up 50%): Driven by short-term speculative sentiment, but the price fell back to $32.44 at the close (up 15.86%), showing the market's recognition of a market capitalization of $5.95 billion; Liquidity performance: The first-day trading volume reached $870 million, with a turnover rate of 34%, higher than the average IPO turnover rate of 25% in the U.S. stock market, indicating that the pricing attracted sufficient investor participation. As of December 2025, CHAGEE's total U.S. stock market capitalization was $2.516 billion, with a P/E ratio of 10.43 times and a P/S ratio of 1.35 times. Although it had declined from the early listing period, it still matched the performance growth rate — in the first three quarters of 2025, revenue was 8.74 billion yuan (a year-on-year growth of 18.6%), and the number of overseas stores increased to 320, verifying the growth logic during the pricing phase. 1. Valuation anchoring must be "solid": Avoid pure concept speculation. CHAGEE's core success in pricing lies in taking hard data such as "2.5 billion yuan net profit" and "6,440 stores" as the basis, and using multiple models for cross-validation; 2. Market game must be "balanced": Among the three parties of the issuer (wanting a high valuation), underwriters (wanting to balance supply and demand) and investors (wanting a low price), a "win-win point" must be found. CHAGEE chose the upper limit of the range, which not only met the fundraising needs, but also left enough profit for investors; 3. Roadshow feedback must be "authentic": The order book is the only basis for pricing. Large, long-term orders from high-quality institutional investors are more valuable than simple oversubscription multiples, which can significantly improve pricing confidence; 4. Timing selection must be "accurate": Avoid periods of market turmoil. CHAGEE chose to list during the stable period of the U.S. consumer sector to maximize the valuation premium. If it had listed during a market downturn, it might have been forced to lower the offering price. CHAGEE's pricing process reflects the core characteristics of U.S. stock "market-oriented pricing", which is significantly different from A-shares: © 2021 Meishun (Hong Kong) Management Consulting Co., Ltd. and Meishun (Hangzhou) Management Consulting Co., Ltd. All Rights Reserved. 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