China's bubble tea boom is brewing billionaires

But IPOs of some tea makers in limbo as competition threatens weaker players

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Are you a fan of bubble tea? Love it or hate it, the passion for the drink has created at least six billionaires in China in the past few years and is at the heart of several other potential fortunes.

Sichuan Baicha Baidao Industrial, China's No. 3 bubble tea chain, this week raised about HK$2.59 billion (S$450 million) in Hong Kong's biggest new share sale since November.

The valuation gives its husband-and-wife founders, Mr Wang Xiaokun and Ms Liu Weihong, a combined net worth of US$2.7 billion (S$3.7 billion) based on the 73 per cent stake they will own after the initial public offering (IPO), according to the Bloomberg Billionaires Index.

Despite Baicha Baidao's confidence, the market debuts of several other Chinese bubble tea makers that have hinted at Hong Kong IPOS are in limbo. Growing competition threatens to take out some of the weaker players, and Hong Kong once among the busiest venues for deals - has lost its appeal as shares have slumped in China's economic downturn. Baicha Baidao shares plunged more than 31 per cent in their trading debut in Hong Kong on April 23, underscoring the challenges the financial hub is facing in reviving investor confidence.

The shares ended the day at HK$12.80, 26.86 per cent lower than the IPO price.