(Yicai) Feb. 13 -- Guming Holdings, the third Chinese bubble tea maker to go public in Hong Kong after Nayuki Holding and Baicha Baidao Industrial, ended 6.4 percent lower on its first day of trading amid increasingly fierce competition in the domestic fresh tea market.

After plunging by as much as 10.2 percent at one point, Guming [HKG: 1364] closed at HKD9.30 (USD 1.19) a share yesterday. It was trading down 6.5 percent at HKD8.70 as of lunch break today.

Hangzhou-based Guming issued around 182 million shares at an initial public offering price of HKD9.94 apiece, raising about HKD1.8 billion (USD231 million).

Around 25 percent of the proceeds will be used to digitalize Gulming's business management and store operations, another quarter will go for enhancing supply chain capabilities, about 20 percent will be for strengthing branding and consumer engagement, and the rest for franchise management, product development, and other general purposes, according to the company.

Guming's IPO attracted five cornerstone investors who subscribed for new shares worth USD71 million. Internet giant Tencent Holdings subscribed for USD25 million through its subsidiary Huang River Investment, while food delivery giant Meituan subscribed for USD8 million via its unit Long-Z Fund.

Opening its first store in China's eastern Zhejiang province in 2010, Guming had 9,778 outlets as of Sept. 30, according to its prospectus. Franchisees run over 99 percent of its shops, with about 80 percent in second and lower-tier cities.

Gaming's net profit rose 11 percent to CNY1.1 billion (USD150.5 million) in the first three quarters of last year from a year earlier, while its revenue jumped 16 percent to CNY6.4 billion, thanks to store expansion and sales growth, the company noted.

After several years of rapid expansion, excess stores in China's tea chain sectors have begun to shut. The number of milk tea shops shrank nearly 40,000 to around 390,000 as of Jan. 15 from a year earlier, according to the latest data from third-party platform Canyandata.

Mixue Group and Auntea Jenny, Guming's two main competitors, filed IPO applications in Hong Kong last year.

Editors: Dou Shicong, Martin Kadiev