Core Viewpoint - The report from GF Securities projects that the adjusted net profit of Hu Shang A Yi (02589) will reach 560 million, 640 million, and 760 million yuan for the years 2025 to 2027 respectively, indicating a clear growth strategy and strong resilience against economic cycles [1][6]. Group 1: Company Growth and Strategy - Hu Shang A Yi has become the second brand in the mid-priced ready-to-drink tea segment to reach 10,000 stores since its establishment in 2013, benefiting from the takeout market starting in May 2025 [2][6]. - The company has improved its user acquisition and retention capabilities, with expectations for its main brand to maintain resilience in same-store performance [2][6]. Group 2: Market Position and Expansion - Hu Shang A Yi holds a significant market position in Northern China, with 4,784 stores by the end of 2024, which is approximately 1,900 more than the second-ranked brand, capturing 52.1% of the market share [7]. - The investment model is characterized by low initial costs for franchisees, with an average startup cost of 275,000 yuan, lower than the industry average of 350,000 yuan, leading to a 98% renewal rate among franchisees in 2024 [7]. Group 3: Product Innovation and Consumer Engagement - The company actively responds to consumer demands by launching 136 new products in the first half of 2025, achieving 15.8 million active members and a quarterly repurchase rate of 40.6% [8]. - In 2025, Hu Shang A Yi is restructuring its coffee product line, anticipating that coffee will contribute to same-store sales growth alongside baked goods [8]. Group 4: Tea Waterfall and International Expansion - The Tea Waterfall brand, priced below 10 yuan, has gained popularity in towns and universities, with over 1,000 signed and operating stores [11]. - Hu Shang A Yi has opened stores in the United States and South Korea, focusing on economically developed countries, with positive performance reported [11].

Core Viewpoint - Guangfa Securities has given a "Buy" rating for Hu Shang A Yi (02589), estimating a reasonable value of HKD 121.32 per share based on a projected PE ratio of 18 times for 2026, with adjusted net profits expected to reach CNY 5.6 billion, 6.4 billion, and 7.6 billion for the years 2025 to 2027 respectively [1][2]. Group 1 - Hu Shang A Yi has become the second brand in the mid-priced ready-to-drink tea segment to reach 10,000 stores since its establishment in 2013, benefiting from the takeout competition and showing strong same-store GMV performance [2]. - The company has a clear development strategy with rapid growth in its core business in China, and it has room for expansion in both new and existing stores, supported by its two wings: Tea Waterfall and overseas markets [1][2]. Group 2 - Hu Shang A Yi holds a significant advantage in the northern region, with 4,784 stores by the end of 2024, accounting for 52.1% of the market share among mid-priced ready-to-drink tea brands, which is substantially higher than other top brands [3]. - The investment model is characterized by low initial costs for franchisees, with an average initial investment of CNY 275,000, which is lower than the industry average, leading to a high renewal rate of 98% for franchisees [3]. Group 3 - The company actively responds to consumer demands by launching new products, introducing 136 new items in the first half of 2025, and achieving a quarterly active membership of 15.8 million with a repurchase rate of 40.6% [4]. - The company is restructuring its coffee product line, expecting it to contribute to same-store sales growth alongside its tea offerings [4]. Group 4 - Tea Waterfall is experiencing rapid growth, with over 1,000 signed and operating stores, and its core products priced below CNY 10, appealing to consumers in towns and universities [5]. - The company has begun international expansion, opening stores in the United States and South Korea, focusing on economically developed countries, with positive performance reported [5].

Group 1: IPO Details - The IPO price range is set between HKD 95.57 and HKD 113.12[1] - The total fundraising amount is estimated at HKD 1.73 billion, based on the median price[1] - The total number of shares available for subscription is 241.13 million, with 90% allocated for international placement and 10% for public offering[1] Group 2: Company Overview - The company, known as "沪上阿姨," is a leading brand in the Chinese mid-priced tea beverage market, with a total of 9,176 stores expected by the end of 2024[2] - The majority of its stores (50.5%) are located in third-tier cities and below, operating primarily through a franchise model (99.7%)[2] Group 3: Market Trends - The mid-priced tea beverage segment accounted for 51.3% of the total market, which was valued at RMB 211.5 billion in 2023, with a projected CAGR of 20.9% from 2023 to 2028[3] - The coffee market in China is also growing rapidly, with a market size of RMB 172.1 billion in 2023 and a projected CAGR of 19.8% from 2023 to 2028[3] Group 4: Financial Performance - In 2024, despite an increase of 1,387 stores, the company's revenue is expected to decline by 1.9% to RMB 3.285 billion, with a net profit decrease of 15.2% to RMB 329 million[4] - The company's net profit margin is projected to decrease by 1.6% to 10.0%[4]