Oriental Rise Launches Hot IPO for Tea Enthusiast

Key Takeaways:

• Oriental Rise’s shares rose 50% in their Nasdaq debut, raising $7 million.
• Funds will be used for expanding cultivation by 50%.

By Doug Young

Oriental Rise Holding Ltd. ORIS debuted on Nasdaq, showcasing a traditional tea business focused on white tea leaves, unlike popular bubble tea chains.

They raised $7 million by issuing 1.75 million shares at $4 each, with Tiger Securities as the underwriter.

China’s traditional tea market lacks public representation despite its rich history. The focus has shifted to high-tech sectors, leaving less room for traditional producers like Oriental Rise to attract funding.

Oriental Rise specializes in white tea, which is less known internationally. This market is growing rapidly, with sales increasing from 2.9 billion yuan ($407 million) in 2017 to 9.1 billion yuan in 2021, and expected to hit 16 billion yuan by 2026.

The company operates in Zherong county, Fujian, under contracts with local villages, which is critical for maintaining good business relationships.

Big Expansion

Oriental Rise’s growth has been limited by its current land size, generating around $24.1 million in revenue last year. However, they turned away approximately 92 million yuan in orders due to capacity constraints.

With $36.7 million in cash reserves, Oriental Rise plans to expand its land by 50% through new agreements that will cost about 87.6 million yuan. A new tea processing plant will also be built for around $5 million.

On its first trading day, Oriental Rise exceeded expectations with a market value of about $132 million, contrasting with a decline in China’s small-cap index. It trades at a modest P/E ratio of 13, suggesting potential for growth compared to other tea producers.

This article is from an unpaid external contributor and is not edited for content or accuracy.