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Chinese tea chain Chagee is pressing ahead with plans to raise nearly $400 million in a US initial public offering this week, despite mounting trade tensions between the US and China and broader market uncertainty, according to the Financial Times.

The Shanghai-based brand, known for its coffee-inspired tea drinks like 'teaspressos' and oolong 'teapuccinos,' is aiming to generate $396 million through its Nasdaq debut, with shares expected to be priced between $26 and $28. If successful, the move would give the company a fully diluted valuation of approximately $5.2 billion.

Chagee’s offering would mark the second-largest US IPO by a Chinese company in over three years.

The listing comes in the wake of renewed trade hostilities, including tariff hikes from the US that now put duties on Chinese imports at around 120%.

Despite trade headwinds, demand from institutional investors appears strong. Chagee’s prospectus notes that CDH Investment Management, Allianz Global Investors Asia Pacific, ORIX Asia Asset Management and RWC Asset Management have shown 'nonbinding' interest in purchasing 51.7% of the available shares.

Chagee’s fast growth in China may be helping to attract investors. The company ran 6,440 stores by the end of 2024, a year-on-year increase of 83%, while annual revenue rose 167% to nearly $1.7 billion.

The IPO is being led by Citigroup, Morgan Stanley, Deutsche Bank and China International Capital Corporation.