KUALA LUMPUR: Malaysia’s bubble tea market has come a long way, having held ground amid many fleeting food and beverage (F&B) trends.

The Taiwanese-born tea drink, known for its seabed of chewy tapioca pearls, has become a mainstay.

There are already some 45 bubble tea operators nationwide. Popular brands in the market now include Chatime, Tealive, The Alley, Tiger Sugar, Gong Cha and Koi Thé.

“Bubble tea craze”, as it is called, has grown over the years as more and more brands, either home-grown or branch outlets, set up their base in Malaysia.

One brand in particular has been growing steadily since its inception two years ago. Tealive, owned by F&B group, Loob Holding Sdn Bhd, was born following a messy corporate divorce with La Kaffa International Co Ltd after the latter ended its Chatime franchise agreement with Loob Holding.

Tealive has since expanded to over 200 outlets nationwide. With that, Loob Holding, which also operates food outlets Ko Ko Kai, Gindaco and Define Food, is continuously expanding.

Just last week the company debuted its first European Tealive outlet in Manchester, UK. It plans to open a second outlet in London later this year. It is expecting to open five outlets in the country in the first year of operations, it said.

In Malaysia, Loob Holding recently said it intended to hire 1,200 to 1,500 more workers over the next two years as it plans to add another 250 Tealive outlets by mid-2021.

The group has also expanded to China, with a plan to set up 10 corporate stores to test its business model before exploring franchise outlet opportunities.

This will be interesting to see given China’s somewhat saturated bubble tea market. There are over 20 bubble tea operators both in China and in Taiwan.

Meanwhile, besides aggressively expanding, Loob Holding is planning an initial public offering (IPO) in Malaysia.

Confirming the plan two weeks ago, Loob Holding chief executive officer Bryan Loo said the group is targeting to list in the first half of next year.

He, however, could not confirm the valuation sought nor the IPO portion, pending final recommendations from advisers.

A report quoting people with knowledge of the matter said the group could raise as much as RM300 million from the exercise.

According to the people, Loob Holding has hired advisers for the planned share sale. They said the firm is considering seeking a valuation of as much as RM1 billion. However, they added that as deliberations of the IPO plan are still in early stages, it may not necessarily lead to a deal.

Should Loob Holding list next year, it could be compared to other public listed F&B companies on Bursa Malaysia such as Berjaya Food Bhd, which operates the Starbucks and Kenny Rogers outlets.

Though there are no confirmed figures in Loob Holding’s planned IPO, the group’s reported asking price of a RM1 billion valuation fares higher compared to Berjaya Food which was valued at RM641.58 million as of May 24.

Berjaya Food, which is currently trading at a price earnings of 28.59 times, has been trading sideways over the past one year. Year to date, however, the stock has climbed 28% to close at RM1.79 last Friday.

Regionally, Loob Holding is not the first bubble tea maker to list on a stock exchange. Over in Taiwan, La Kaffa International has been listed on the Taipei Exchange since 2012 and is currently valued at NT$4.71 billion (RM625.33 million).

It is the only public-listed bubble tea company in Taiwan. In fact, local Taiwanese reports say La Kaffa plans to list a subsidiary on the Australian stock exchange in the third quarter of 2019.

In Hong Kong, B&S International Holdings Ltd, known for a famous franchise called TenRen, debuted on the local stock exchange last year. It had a market capitalisation of HK$332 million (about RM177.16 million) as at May 21.

Over the past year, share prices of La Kaffa have risen 47% while those of B&S International have fallen some 62%.