Core Viewpoint - Bawang Chaji's stock price has halved within five months of its listing, raising questions about its sudden decline after being a "internet celebrity" in the tea beverage industry [3][4] Financial Performance - In Q2, Bawang Chaji reported revenue of 3.332 billion yuan, a year-on-year increase of 10.2%, while net profit attributable to shareholders was 70 million yuan, down 88.82% year-on-year [3] - Adjusted net profit for Q2 was 630 million yuan, a slight increase of 0.13% year-on-year [3] - Revenue growth has significantly slowed compared to pre-listing levels, with projected revenue growth of 167.35% and net profit growth of 228.63% for 2024 [4] Store Expansion and Performance - As of the end of Q2, Bawang Chaji had 7,038 stores, an increase of 357 stores from the previous quarter, but this growth rate has slowed compared to the 913 stores added in the same period last year [4] - The average monthly GMV per store in Greater China was 403,500 yuan, down 25% from 538,000 yuan in the same period last year [5] Market Strategy and Challenges - Bawang Chaji's rapid store expansion has led to a decline in single-store GMV, with a continuous decline over three quarters starting from Q4 2024 [6] - The company relies heavily on a few key products for sales, with over 40% of sales coming from its popular product, Boya Juexian [6] - The company has chosen not to engage in price wars, which, combined with a reliance on high-priced products, has increased pressure amid declining consumer spending [7] Competition and Market Dynamics - Bawang Chaji has not participated in the recent "takeaway war," which has seen competitors like Mixue and Gu Ming achieve better performance by offering discounts [8] - The number of active members decreased by 14.03% to 38.6 million in Q2, down from over 42 million in the previous four quarters [8] International Expansion - Bawang Chaji is expanding into overseas markets, with 208 international stores as of Q2, a year-on-year increase of 93 stores [9] - The company has established a new management team for North America to support its expansion, including hiring experienced executives from Starbucks and other companies [9] - The overseas single-store GMV also saw a decline of 18.1% year-on-year in Q2, marking the second consecutive quarter of decline [10]

Core Insights - The company, Hu Shang A Yi, is preparing for the peak season of tea beverages by launching supportive policies for franchise partners, particularly targeting young entrepreneurs [2] - The company is innovating its product offerings to align with market trends, focusing on health and dietary needs [3][4] - A robust support system for franchisees is established, covering site selection, supply chain, operations, and marketing [5][6][7] Group 1: Franchise Support Initiatives - Hu Shang A Yi announced several promotional policies to alleviate financial burdens on franchise partners, including a reduction of 20,000 yuan in brand authorization fees and a 30% down payment on equipment costs, with the remaining amount payable in 12 months interest-free [2] - The company aims to empower young entrepreneurs and franchise partners in Shandong by providing policy support and brand empowerment [2] Group 2: Product Innovation - Starting in 2024, the tea beverage industry is undergoing a health transformation, with Hu Shang A Yi upgrading its product standards to include a new "Super Fruit and Vegetable Tea Series" that provides 20% to 35% of the daily dietary fiber requirement for adults [3][4] - The launch of the new product line generated significant consumer interest, achieving over 10 million views on social media within 12 hours [4] Group 3: Operational Support - Hu Shang A Yi has developed a comprehensive support system for franchisees, utilizing big data and established models to assist in site selection, thereby increasing the success rate of new openings [5] - The company maintains a global direct sourcing supply chain to ensure consistent quality and timely delivery of raw materials, which is crucial for efficient store operations [5] - Regular training programs are conducted to enhance the operational management and standardized service capabilities of franchise stores [6] Group 4: Marketing Strategies - The company actively organizes national and regional marketing campaigns and collaborates with well-known IPs to drive traffic and stimulate consumer interest [7] - The combination of attractive franchise policies, innovative product offerings, and solid operational support is driving Hu Shang A Yi's scalable growth, with over 9,100 stores across more than 300 cities by the end of 2024 [7]