Company Background - Eight Horses Tea is a leading tea brand and retail chain in China, covering all six major categories of tea and tea utensils [1] - The company is expected to rank first in the number of tea chain stores in China by 2024, with significant market shares in Oolong and black tea [1] - Over the past three years, the company's revenue and profit have grown at a CAGR of 8.6% and 16.2%, respectively, with projected revenues and net profits of 2.143 billion and 224 million yuan in 2024 [1] - The company operates three main brands: the core brand Eight Horses Tea, the sub-brand Xinjihua focusing on high-end Pu'er tea, and the newly established sub-brand Wanshanhong targeting younger consumers [1] Industry Landscape - The high-end tea market is growing faster than the overall market, with a projected market size of 325.8 billion yuan in 2024 and a high-end segment size of 103.1 billion yuan [2] - The high-end tea market is expected to grow at a CAGR of 5.6% from 2024 to 2029 [2] - The Chinese tea market is fragmented, with a CR5 of approximately 5.6% in 2024, and Eight Horses Tea holds a market share of about 1.7% in the high-end segment, ranking first [2] Brand Development - Eight Horses Tea is recognized for its deep cultural heritage, with its founder being a descendant of a 300-year-old tea-making family and a practitioner of intangible cultural heritage techniques [3] - The company has established a strong brand presence in the tea retail sector, with a sales network covering all major cities in China [3] - As of the first half of 2025, the company plans to have a total of 3,585 stores, with 90% being franchise stores [3] Future Growth Drivers - The company aims to increase its store penetration by adding 1,500 new stores within three years and upgrading existing stores to enhance customer experience and sales efficiency [4] - It plans to strengthen its big product strategy and expand its product matrix to cover various price ranges and consumer groups [4] - The company is exploring the development of ready-to-drink pure tea beverages as a new growth point in the future [4]