Chagee IPO: Can It Recreate the Glory of China's Tea Beverage Brands?
This week, Chagee officially filed its IPO prospectus with SEC, planning to list on NASDAQ under the ticker $Chagee Holdings Limited(CHA)$.
173% YOY Growth Pushes it to Become the Second Largest Tea Beverage Brand in Just Three Years
The prospectus shows that in 2024, Chagee's GMV (Gross Merchandise Value) reached 29.5 billion RMB, a 173% year-on-year increase, nearly three times the previous year.
Its annual revenue was 12.4 billion RMB, surpassing brands like Chabaidao and Gu Ming. Chagee has become the second-largest domestic tea brand, just behind $MIXUE GROUP(02097)$.
High-End Tea Beverage Route: Profit Margin Exceeds Mixue
After turning a profit in 2024, Chagee's net profit reached 2.515 billion RMB, with a net profit margin of 20.3%, surpassing Mixue's 18.7%. $GUMING(01364)$'s net profit margin for the first three quarters of last year was 17.4%, and $Luckin Coffee Inc.(LKNCY)$’s was 16.9%.
Chagee aims to be the " $Starbucks(SBUX)$ of the East." Unlike other tea brands that frequently launch new products, Chagee offers fewer SKUs and focuses on high-end teas priced above 17 RMB. Its three main products, including "Jasmine Green Tea Latte," account for over 60% of its revenue.
Concerns Despite Growth: Same-Store Sales Decline During High Growth Period
From Q1 2022 to Q4 2023, Chagee's same-store sales steadily increased.
However, starting in Q1 2024, the same-store sales began to decline for the first time, with a sharp 18.4% year-on-year decrease in Q4, dropping to 456,000 RMB.
In contrast, Mixue, with 40,000 stores, saw only a 0.6% drop in same-store sales in Q3 2024.
Perfect Timing for IPO: Can Chagee Duplicate the Surge of Mixue?
Chagee's IPO is happening during a time when the tea beverage market has surged, thanks to Mixue’s rise and the current bull market for Chinese stocks. Mixue has risen 112% this year.
Although future performance is uncertain, the financial metrics in the IPO prospectus are impressive. If the current market boom in Hong Kong and A-shares continues, Chagee is likely to see an increase on its IPO day.
Will you participate in Chagee’s IPO?
After quickly turning losses into profits: Can the profitability trend continue?
Do you like Chagee's tea latte?
Why do you choose Chagee over other bubble tea brand?
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I find Chagees rapid growth and strong financial performance impressive, especially its ability to turn profitable so quickly. With a net profit margin of 20.3%, it has outpaced competitors like Mixue and Luckin Coffee, which suggests that its high-end positioning and premium pricing strategy are working. The fact that Chagee focuses on a smaller range of high-quality products rather than frequently launching new flavors also aligns with its goal of being the “Starbucks of the East.” However, while its IPO timing seems favorable given the bullish sentiment around Chinese stocks, I'm cautious about whether it can sustain this profitability in the long run.
One concern I have is the decline in same-store sales, which dropped sharply by 18.4% in Q4 2024. This is a red flag because it indicates that growth might be driven more by aggressive expansion rather than strong consumer demand per store. In contrast, Mixue $MIXUE GROUP(02097)$ , which operates on a much larger scale, saw only a slight dip of 0.6% in same-store sales. If Chagee $Chagee Holdings Limited(CHA)$ wants to maintain its premium positioning while expanding further, it will need to ensure that existing stores remain profitable rather than relying solely on new store openings to drive revenue growth.
As for whether I would participate in Chagee's IPO, I'd approach it with some caution. While the strong growth figures and current market momentum could lead to a short-term surge, I'd want to see how it sustains its profitability post-IPO, especially in a competitive and rapidly changing market. I do enjoy Chagee's tea lattes, particularly their Jasmine Green Tea Latte, but in the long run, I think its ability to keep customers engaged and maintain pricing power will determine its true investment potential.
@Tiger_SG @Daily_Discussion @TigerStars @Tiger_comments @TigerGPT
This week, Chagee officially filed its IPO prospectus with SEC, planning to list on NASDAQ under the ticker $Chagee Holdings Limited(CHA)$.
The prospectus shows that in 2024, Chagee's GMV (Gross Merchandise Value) reached 29.5 billion RMB, a 173% year-on-year increase, nearly three times the previous year.
Its annual revenue was 12.4 billion RMB, surpassing brands like Chabaidao and Gu Ming. Chagee has become the second-largest domestic tea brand, just behind $MIXUE GROUP(02097)$.
Will you participate in Chagee’s IPO?
After quickly turning losses into profits: Can the profitability trend continue?
Do you like Chagee's tea latte?
Why do you choose Chagee over other bubble tea brand?
🌟🌟🌟Asia's love affair with tea continues with the explosive growth of $MIXUE GROUP(02097)$ and $Chagee Holdings Limited(CHA)$ 's forthcoming IPO to list on Nasdaq. After the overwhelming successful IPO of Mixue , I believe that Chagee's IPO will be just as successful as Mixue.
Chagee catapults to be the 2nd largest tea brand after Mixue. Chagee's goal is to serve tea lovers in 100 countries , generate 300,000 employment opportunities worldwide and in the process it aims to deliver 15 billion cups of freshly brewed tea annually.
From its humble beginnings in Yunnan China, Charge has established itself as one of the leading international tea beverage companies with over 6,000 stores worldwide today.
Chagee has shown impressive annual revenue of 12.4 billion RMB even beating well known brands like Chaibaidao and Gu Ming . Its net profit reached 2.515 billion RMB and has a net profit margin of 20.3%. That is even better than Mixue's 18.7%.
I was recently in Guangzhou and have seen first hand how popular Chagee is - long queues with eager customers wanting a taste of the freshly brewed tea especially the very popular Jasmine Green Tea Latte .
Founder and CEO Junjie Zhang created Chagee in order to modernise tea drinking . He said he was inspired by the success of international coffee companies such as Starbucks.
I would be interested to find out more about Chagee's forthcoming IPO. Chagee is preparing to open its very first US store in Westfield Century City Mall in Los Angeles in spring . If it is successful, it may start a new tea drinking mania in the US .
@Tiger_SG @Tiger_comments @TigerClub @CaptainTiger @TigerStars
但问题是，这种盈利趋势能否持续？Chagee的定价比喜茶、奈雪等品牌更亲民，但又比蜜雪冰城、茶百道等高端一些，它靠的是“中高端+茶文化”来吸引消费者。然而，随着市场竞争加剧，品牌忠诚度能否保持？尤其是当消费者钱包收紧时，他们还会不会愿意为Chagee的茶饮买单？
至于产品，我确实喜欢Chagee的拿铁茶系列。相较于传统奶茶，它的茶香更浓，口感也更加顺滑，这种定位也让它在市场上与其他品牌形成了差异化。但如果让我在Chagee和其他珍珠奶茶品牌之间做选择，我会更看重品牌的稳定性和扩张策略，而不是单纯的产品口味。
所以，我会不会参与IPO？如果定价合理，我可能会短线参与博弈。但长期持有的话，我更想看看它在上市后能否保持增长势头。