Guming Holdings Ltd.’s $233 million Hong Kong initial public offering bolstered the value of the stake owned by its millennial founder, Yun’an Wang, to $1.2 billion, according to the Bloomberg Billionaires Index. Shares were sold at HK$9.94 each in the IPO.  

Wang joins the growing club of Chinese bubble tea billionaires who have sprouted in recent years amid soaring demand for the drinks—a $9.6 billion market in 2018 that’s forecast to balloon into $71 billion in three years. But he’s also taking his company public at a time investors are becoming increasingly wary about pumping money into such a competitive industry, where vendors regularly engage in price wars.

Take Sichuan Baicha Baidao Industrial Co., the maker of Chabaidao tea. It was the last firm concocting the drinks—made by mixing tea with fresh fruit, tapioca balls or milk—to list in Hong Kong. Its trading debut in April flopped and the stock has slid further since.

That hasn’t stopped Wang and his rivals from seeking to raise funds so they can keep adding to the thousands of stores their chains already have. For example, industry leader Mixue Group has revived plans for an IPO.

Wang and his army of underwriters, led by Goldman Sachs Group Inc. and UBS Group AG, are betting that Guming, which sells tea under the “Good me” brand, will appeal to investors because of his unique strategy. While others seek to make their fortunes in metropolises like Beijing and Shanghai, the company specifically targets smaller cities and townships where bubble tea isn’t as readily available and where growth outpaces that of large megacities, according to Guming.   

He would know. Wang opened his first tea shop in his hometown of Daxi—whose population of under 200,000 makes it a tiny place by Chinese standards—in Zhejiang province near Shanghai nearly 15 years ago. According to local media, his shop was so empty early on that there were days when Wang would only sell around 100 yuan ($14) of tea a day—even after selling some drinks to his co-founder.  

Since then, his tea chain has caught on and expanded deeper into China’s hinterland to amass nearly 10,000 stores. After surviving the ultra-competitive landscape, Wang’s brand emerged as the second largest among freshly made bubble tea makers in terms of total sales and number of stores by the end of 2023, according to research cited in the IPO prospectus. 

Guming’s Good me had a market share of 9.1% as of the end of 2023 among China’s top five bubble brands, trailing only Mixue’s 20%, according to the research.

The industry is “always full of crazy promotions,” Guming’s Wang said in an interview to Southern Metropolis Daily in December 2023. “We are already used to a price war. Every year there will be a new bubble tea brand popping up.”

Wang, whose parents ran a small retail business near the border with Myanmar, received a bachelor’s degree in material science and engineering in 2010 from Zhejiang Sci-Tech University, the same year he opened his first Good me. As of September, the company was present in 17 provinces across China.

Starting in Taiwan as a sugary, high-calorie comfort drink, bubble tea has evolved drastically on the Chinese mainland, with various chains competing to offer healthier versions like tea latte or freshly brewed ice tea blend with fruit compote or juice.