Core Viewpoint - Baima Tea Industry is preparing for an IPO on the Hong Kong Stock Exchange, marking a significant step after multiple attempts to list on the A-share market. The company aims to leverage its extensive retail network and brand positioning to attract investors in a competitive market [4][24][29]. Group 1: Company Background - Baima Tea Industry was founded by three brothers from a century-old tea family in Anxi, Fujian, and has grown to over 3,500 stores, primarily through a franchise model [4][16]. - The company initially struggled with sales but pivoted to offer individually packaged tea bags to cater to younger consumers' preferences for convenience [9][10]. - By 2012, Baima Tea had nearly 1,000 stores and began to attract significant investment, leading to its listing on the New Third Board [10][21]. Group 2: Financial Performance - Baima Tea's revenue reached RMB 18.18 billion in 2022, RMB 21.22 billion in 2023, and RMB 16.47 billion in the first three quarters of 2024, with net profits of RMB 1.66 billion, RMB 2.06 billion, and RMB 2.08 billion respectively [18]. - The company relies heavily on marketing, with sales and marketing expenses accounting for over 30% of revenue, while R&D spending remains low [19]. Group 3: Market Position and Challenges - The tea industry in China faces challenges, including a lack of standardized quality and a predominance of small family-run businesses, which limits brand recognition and pricing power [27]. - Baima Tea's IPO journey reflects broader trends in the industry, as many traditional tea companies have struggled to go public, prompting a shift towards the Hong Kong market [24][26]. - The recent success of new tea beverage brands in the IPO market highlights a growing interest in innovative consumer companies, contrasting with the struggles of traditional tea brands [28].

Core Viewpoint - Baima Tea is making another attempt to go public, this time targeting the Hong Kong stock market after several unsuccessful attempts in the A-share market [2][10]. Group 1: Company Background and History - Baima Tea was founded in the 1990s by Wang Wenli and his brothers, initially starting as "Xiyuan Tea Factory" [5]. - The company has expanded significantly, with nearly 1,000 chain stores by 2012 and a focus on positioning itself as a "luxury tea" brand [6][8]. - As of October 2024, Baima Tea has over 3,500 chain stores and has been recognized as one of China's top 500 brand values, with a brand value of 31.36 billion yuan [13]. Group 2: Financial Performance - From 2021 to 2023, Baima Tea's revenue was 1.744 billion yuan, 1.818 billion yuan, and 2.122 billion yuan, with net profits of 163 million yuan, 166 million yuan, and 206 million yuan respectively [2]. - In the first three quarters of 2024, the company reported revenue of 1.647 billion yuan and a net profit of 208 million yuan [2]. - The number of franchisees increased from 106 to 169 between 2022 and 2023, but only 39 new franchisees were added in the first three quarters of 2024, indicating a downward trend [19]. Group 3: IPO Attempts and Challenges - Baima Tea has faced multiple challenges in its IPO journey, including failed attempts to list on the Shenzhen Stock Exchange and the New Third Board [9][10]. - The company submitted its application for an IPO in Hong Kong in January 2023, but faced issues with its prospectus becoming invalid after not passing hearings within six months [10]. - Concerns regarding the management structure, which is heavily family-oriented, have raised questions about governance and potential conflicts of interest [14][15]. Group 4: Market Position and Industry Context - Baima Tea ranks first in the Chinese tea market in terms of chain store numbers and sales revenue, particularly in the high-end tea segment [8]. - The tea industry in China is characterized by low concentration and many small players, making it difficult for traditional tea companies to attract capital [17]. - The rise of new tea brands favored by younger consumers poses a challenge to traditional tea companies like Baima Tea [18].

Core Viewpoint - Baima Tea Industry is attempting to go public in Hong Kong after multiple unsuccessful attempts to list in mainland China, highlighting the challenges faced by traditional tea companies in the capital market [2][6][8]. Company Overview - Baima Tea Industry has reported revenues of 17.44 billion CNY, 18.18 billion CNY, and 21.22 billion CNY from 2021 to 2023, with net profits of 1.63 billion CNY, 1.66 billion CNY, and 2.06 billion CNY respectively. In the first three quarters of 2024, the company achieved revenues of 16.47 billion CNY and a net profit of 2.08 billion CNY [2][11]. - The company has a total of 3,498 offline stores as of September 2024, with 3,224 being franchise stores, accounting for 92% of the total [7]. Market Position - According to a report by Frost & Sullivan, Baima Tea Industry ranks first in the Chinese tea market in terms of the number of chain stores and sales revenue in the high-end tea market as of the end of 2023 [4]. - The company has maintained the highest sales volume of Tieguanyin tea for over ten years and has ranked first in the sales of rock tea for five consecutive years [4]. IPO Attempts - Baima Tea Industry has made several attempts to go public, including plans for the Shenzhen Stock Exchange in 2013, listing on the New Third Board in 2015, and applying for the ChiNext in 2021, all of which were unsuccessful [2][5][6]. - The company submitted a new application for a main board listing in 2023, but this was also terminated by the Shenzhen Stock Exchange [5][6]. Family Management Structure - The management of Baima Tea Industry is characterized by a family-run structure, with major shareholders being family members who hold 55.9% of the voting rights [8][9]. - This family-centric governance model has raised concerns about potential conflicts of interest and the ability to maintain operational independence post-IPO [8][9]. Industry Challenges - The tea industry in China faces challenges such as low market concentration and a large number of small-scale enterprises, making it difficult for traditional tea companies to attract capital [9]. - The company has seen a significant decline in the net increase of franchisees, from 106 in 2022 to only 39 in the first three quarters of 2024, indicating a slowdown in growth [10][11]. - Franchise fee revenue dropped dramatically from 740,000 CNY in 2022 to 50,000 CNY in 2023, a decline of 93% [11].