Core Viewpoint - The journey of Baima Tea Industry towards an IPO has been fraught with challenges, leading the company to shift its focus from A-share to Hong Kong stock market for listing opportunities [2][4][5]. Group 1: Company Background and Listing Attempts - Baima Tea Industry began its IPO journey in 2013, completing nearly 150 million yuan in private equity financing and attempting to list on the Shenzhen Stock Exchange, but was unsuccessful [3]. - The company switched to the New Third Board in 2015, successfully listing as the "first stock of Tieguanyin," but withdrew in 2018 due to strategic adjustments [3]. - In 2021, Baima Tea submitted a prospectus to the Shenzhen Stock Exchange's Growth Enterprise Market but withdrew the application in May 2022 after multiple inquiries [3][4]. - In September 2023, Baima Tea submitted an application to withdraw its IPO application for the Shenzhen main board, marking another setback in its listing efforts [3]. Group 2: Market Context and Challenges - The Chinese tea market has seen significant growth, expanding from 214.8 billion yuan in 2016 to 304.9 billion yuan in 2021, yet no tea companies have successfully listed on the A-share market [5]. - The challenges faced by Baima Tea reflect broader issues within the Chinese tea industry, including a lack of standardization and market acceptance for traditional tea companies [8]. - The company has faced operational difficulties, with a reported revenue of 1.063 billion yuan in the first half of 2023, a year-on-year decline of 4.23% [9][10]. Group 3: Financial Performance and Market Position - Baima Tea is a leading player in the Chinese tea market, with 3,501 offline stores projected by January 2025 and ranking first in sales for high-end tea, Oolong tea, and black tea [9]. - The company reported revenues of 1.818 billion yuan, 2.122 billion yuan, and 2.143 billion yuan for 2022, 2023, and 2024 respectively, with net profits of 166 million yuan, 206 million yuan, and 224 million yuan [9]. - Despite its strong market position, Baima Tea's market share remains below 2%, which poses challenges for its capital story [15]. Group 4: Ownership and Governance - Baima Tea is a family-owned business, with the Wang family holding 62.80% of the shares, including key positions held by family members [11][12]. - The company has undergone 25 changes in equity structure, raising concerns about compliance and governance in the eyes of investors [14][15]. - The family connections and strategic partnerships have drawn attention, with some viewing it as a potential advantage in the competitive landscape [13].

Core Viewpoint - Baima Tea Industry is attempting to go public again after multiple unsuccessful attempts since 2013, facing challenges from market skepticism towards tea companies and internal governance issues [1][3] Company Overview - Baima Tea Industry has submitted a prospectus to the Hong Kong Stock Exchange, aiming to break the cycle of failed IPO attempts [1] - The company has shifted its positioning from a refined tea processing enterprise to a retail business, but this change has not alleviated concerns from regulators [3] Financial Performance - Despite a steady growth in revenue and net profit from 2022 to 2024, Baima Tea Industry experienced a decline in both metrics in the first half of this year, with a 5.27% drop in offline sales revenue [1][3] - The company maintains a gross profit margin above 50% [1] Market Strategy - Baima Tea Industry plans to implement a "thousand cities, ten thousand stores" strategy, aiming to open 1,500 new stores in the next three years, primarily in lower-tier cities [3] - The focus market for expansion is the Central China region [3] Challenges - The decline in offline sales revenue raises concerns about the purchasing power of the company's large offline membership base, potentially impacting expansion plans [3] - The family governance structure, with significant roles held by the Wang family, remains a point of concern for investors [3]

Core Viewpoint - Baima Tea Industry has made progress in its IPO process in Hong Kong, having received the "full circulation" filing notice from the China Securities Regulatory Commission (CSRC), allowing it to enter the hearing stage at the Hong Kong Stock Exchange [2][3]. Group 1: IPO Progress - Baima Tea plans to issue up to 29.13 million shares of overseas listed ordinary shares, while 106 shareholders will convert 43.9869 million shares of unlisted domestic shares into overseas listed shares [2]. - The previous IPO application submitted on January 17, 2023, became invalid due to the lack of the CSRC's "full circulation" filing notice, which is now resolved [3]. - The company must update its prospectus within three months to continue the review process [3]. Group 2: Historical Challenges - Baima Tea's IPO journey has faced multiple challenges, including a failed attempt to list on the Shenzhen Stock Exchange in 2013 and subsequent withdrawals from the market due to regulatory issues [5][6]. - The CSRC raised 46 specific questions regarding the company's operations, including concerns about related party transactions and the adequacy of R&D investment [5][6]. Group 3: Compliance and Regulatory Issues - The key to Baima Tea's successful listing hinges on resolving previous regulatory concerns, particularly regarding related party transactions, which amounted to approximately 300 million yuan in 2020 [6][8]. - The company has a complex network of related party transactions, with over 60% of significant transactions linked to the controlling shareholder's family [6][10]. Group 4: Financial Metrics and Requirements - Baima Tea has exceeded the profitability requirements set by the Hong Kong Stock Exchange, with a net profit of 3.72 billion yuan from 2022 to 2023 and 208 million yuan in the first three quarters of 2024 [12][13]. - The company meets the operational history and management stability requirements, having been established for 28 years and controlled by the Wang family [12][13]. Group 5: Market Challenges - The traditional tea industry has low capitalization, with only two listed tea companies in Hong Kong, both of which have underperformed in the market [19][21]. - The tea market in China is substantial, with a projected domestic sales market size of 340 billion yuan in 2024, but the industry faces challenges in transparency and standardization [20]. Group 6: Future Considerations - Baima Tea's ability to attract investors post-IPO remains uncertain, as traditional tea companies struggle to gain market interest due to a lack of recognition and investor confidence in their business models [24]. - The company must navigate several critical steps in the IPO process, including submitting updated application materials, passing the hearing stage, and successfully marketing its shares to potential investors [15][16].

Core Viewpoint - Baima Tea's long-awaited IPO in Hong Kong faces challenges due to performance slowdown and governance issues, despite its historical significance in the tea industry and recent approval for overseas listing by the China Securities Regulatory Commission [1][2]. Financial Performance - Baima Tea's revenue for 2022 was RMB 1.82 billion, with a projected increase to RMB 2.12 billion in 2023, but the revenue for the first three quarters of 2024 shows only a slight increase to RMB 1.65 billion, indicating a growth slowdown [4]. - The company's net profit grew by 24.05% in 2023 but only by 5.87% in the first three quarters of 2024, reflecting a significant deceleration in performance [9]. Research and Development - The company's R&D expenditure is notably low, accounting for less than 1% of revenue, with figures of RMB 822,000, RMB 1.16 million, and RMB 1.01 million for 2022, 2023, and the first three quarters of 2024, respectively [3][4]. - Baima Tea has only 17 R&D personnel, representing 0.73% of its total workforce, raising concerns about its capacity for innovation [5]. Business Model and Growth Challenges - The company heavily relies on a franchise model, with 92.1% of its 3,498 stores being franchises. However, the growth rate of new franchise stores has significantly declined, with only 170 new stores added in the first three quarters of 2024 compared to 475 in 2023 [8][9]. - The average procurement amount per franchise store has decreased from RMB 35.36 million in 2022 to RMB 25.37 million in the first three quarters of 2024, impacting overall revenue from franchise sales [8]. Governance Issues - Baima Tea's governance structure is heavily family-controlled, with the Wang family holding 55.9% of voting rights and all non-independent board seats occupied by family members, raising concerns about decision-making independence and potential conflicts of interest [11][13]. - The family’s interconnected business relationships with other companies may complicate governance and increase operational risks [13]. Market Position and Investor Sentiment - The traditional tea industry faces a lack of brand recognition and core competitiveness, making it difficult for companies like Baima Tea to attract investor interest and achieve stable growth [16]. - The overall sentiment in the capital market towards traditional tea companies remains lukewarm, as evidenced by the poor performance of other tea companies listed in Hong Kong [16].

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].

Core Viewpoint - Eight Horses Tea's IPO application in Hong Kong has become ineffective after six months, pausing its listing process and marking the fourth failed attempt to go public, following three unsuccessful attempts in the A-share market [2][8][16]. Group 1: IPO Journey - Eight Horses Tea submitted its IPO application to the Hong Kong Stock Exchange on January 17, but the application has now lapsed [2][3]. - This marks the fourth attempt by Eight Horses Tea to enter the capital market, with previous attempts in 2013, 2021, and 2022 all failing [8][12]. - The company was required to supplement its application with additional information, including details on past capital increases and share transfer pricing [14][16]. Group 2: Financial Performance - Eight Horses Tea has shown revenue growth in 2022, 2023, and the first three quarters of 2024, with revenues of 1.818 billion, 2.122 billion, and 1.647 billion RMB respectively [24]. - Net profits for the same periods were 166 million, 206 million, and 208 million RMB, indicating a slowdown in growth momentum [24]. - The company's reliance on offline channels and franchisees is significant, with offline revenue accounting for approximately 70% of total revenue, while the gross margin from franchise sales was only 46% in the first three quarters of 2024 [25][26]. Group 3: Industry Challenges - The tea industry in China faces significant challenges in going public, with many tea companies struggling to complete their IPOs [30][34]. - Eight Horses Tea has faced scrutiny regarding its franchise model and related party transactions during previous IPO attempts, which have contributed to its repeated failures [36][37]. - The company has three months to update its financial data and resubmit its application, but it faces challenges beyond just updating information, particularly in balancing scale and risk [38][40].