By LU Yibei

The IPO application of Green Tea Group Limited has failed again. The restaurant chain has failed twice before – in October 2021 and April this year.

It does not mean the termination of the IPO process, nor does HKEX has a negative opinion on the company. The issuer only needs to supplement the latest financial information within 3 months to continue the listing process.

However, Green Tea Restaurant’s three failures show the capital market is not optimistic about the company.

From 2019 to 2021, Green Tea’s revenue rose from 1.7 billion yuan (US$250 million) to 2.3 billion yuan.

As of 2021, Green Tea had 236 restaurants in China. According to the prospectus, it is expected that a total of 275 new Green Tea Restaurants will be opened by 2024.

The prospectus shows that from 2019 to 2021, the table turnover rate was at 3.3 changes per day. Before the pandemic, the highest rate was 8 times, said WANG Qinsong, the founder of the restaurant chain.

The poor performance of Green Tea Restaurant is down to bad product innovation and limited marketing.

In 2020 and 2021, Green Tea introduced a total of 325 new dishes, but orders are still dominated by a roast chicken sandwich launched 10 years ago.

According to the prospectus, it is expected that a total of 275 Green Tea Restaurants will be opened from 2022 to 2024. Among them, the East China market and the market outside East China, Guangdong and North China are the focus of the future layout of Green Tea Restaurants.