Core Viewpoint - Citigroup's research report indicates that Green Tea Group has issued a positive profit forecast, expecting a year-on-year increase of 38% to 42% in adjusted net profit for the first half of this year, reaching between 247 million to 254 million yuan, driven by a revenue growth of 21% to 25% and improved profitability at the store level [1] Group 1: Financial Performance - Green Tea Group anticipates adjusted net profit for H1 to be between 247 million to 254 million yuan, reflecting a year-on-year growth of 38% to 42% [1] - Revenue is expected to grow by 21% to 25%, contributing to the overall profit increase [1] Group 2: Growth Potential - Citigroup projects that the net profit for Green Tea Group will grow by 29% and 26% in 2025 and 2026 respectively, driven by accelerated revenue growth [1] - Revenue growth rates are forecasted to be 19% in 2025 and 21% in 2026, with a more modest growth of 7% in 2024 [1] - The number of new store openings is expected to increase, with projections of 150 stores in 2025 and 200 stores in 2026, compared to 105 stores in 2024 [1] Group 3: Investment Recommendation - Citigroup has set a target price of 11.1 HKD for Green Tea Group shares and has rated the stock as "Buy" [1]

Core Viewpoint - Green Tea Group (06831) is set to launch an IPO from May 8 to May 13, 2025, offering 168 million shares at a price of HKD 7.19 per share, with 10% allocated for Hong Kong and 90% for international sales, plus a 15% over-allotment option [1][2] Group 1: Company Overview - Green Tea Group is a well-known operator of casual Chinese restaurants in mainland China, with a focus on affordable pricing and a diverse menu [1] - The company opened its first restaurant in Hangzhou in 2008 and has since expanded to a network of 493 restaurants across 21 provinces, four municipalities, two autonomous regions, and Hong Kong [1] - According to a report by Zhaoshang Consulting, the company ranks third in terms of the number of restaurants and fourth in revenue among casual Chinese restaurant brands in mainland China as of 2024, holding a market share of 0.7% [1] Group 2: Growth and Expansion - The total number of restaurants increased from 276 as of December 31, 2022, to 465 by December 31, 2024, reflecting a compound annual growth rate (CAGR) of 29.8% [2] - The company plans to open 150, 200, and 213 new restaurants in 2025, 2026, and 2027, respectively, with 32 restaurants already operational and 17 more under lease agreements for 2025 [2] - The majority of the restaurants are located in shopping malls, which supports customer accessibility and foot traffic [2] Group 3: Financial Projections and Use of Proceeds - The estimated net proceeds from the global offering, assuming no exercise of the over-allotment option, will be approximately HKD 746 million after deducting underwriting fees and expenses [3] - Approximately 63.3% of the proceeds will be used to expand the restaurant network, while 26.3% will fund capital expenditures for a central food processing facility in Zhejiang Province [3] - About 5.4% will be allocated for upgrading the company's IT systems and infrastructure, and 5.0% will be used for working capital and other general corporate purposes [3]