Core Viewpoint - Baima Tea's long-standing ambition for an IPO has faced significant challenges, including a lack of investor interest in traditional tea companies and internal issues such as insufficient R&D investment and family governance concerns [2][3]. Group 1: Financial Performance - Baima Tea's revenue for 2022 was RMB 1.82 billion, with a gross profit of RMB 969.5 million, and in 2023, revenue increased to RMB 2.12 billion, with a gross profit of RMB 1.11 billion [6]. - The company's revenue growth has slowed, with a mere 0.95% increase in the first three quarters of 2024 compared to the previous year, while net profit grew by 5.87% [12]. - The average procurement amount per franchise store has declined from RMB 353,600 in 2022 to RMB 253,700 in the first three quarters of 2024 [10]. Group 2: R&D and Marketing Expenditure - Baima Tea's R&D expenditure was notably low, accounting for only 0.45% to 0.61% of revenue from 2022 to the first three quarters of 2024, with amounts of RMB 822,000, RMB 1.16 million, and RMB 1.01 million respectively [5][7]. - In contrast, marketing expenses were significantly higher, totaling RMB 617.6 million in 2022 and RMB 680.9 million in 2023, representing 33.9% and 32.1% of revenue respectively [7]. Group 3: Business Model and Growth Challenges - The company heavily relies on a franchise model, with 92.1% of its 3,498 stores being franchises, which has led to rapid expansion but is now facing growth fatigue [10]. - The number of new franchise stores added in 2024 is projected to be only 227, a significant drop from 475 in 2023 [10]. Group 4: Governance Issues - Baima Tea's governance structure is highly concentrated within the Wang family, controlling 55.9% of voting rights, raising concerns about decision-making independence and potential conflicts of interest [14][16]. - The family governance model, while efficient in early stages, poses risks for a company seeking to go public, as highlighted by the China Securities Regulatory Commission's extensive feedback on Baima Tea's IPO application [16][17].