Core Viewpoint - The article discusses the challenges and recent progress of Baima Tea Industry in its pursuit of an IPO, highlighting the contrasting attitudes of the capital market towards traditional tea companies versus new tea beverage brands [2][4]. Group 1: IPO Progress and Challenges - Baima Tea Industry has faced multiple setbacks in its IPO attempts, including an automatic expiration of its prospectus due to failure to pass the hearing within six months [4]. - The company has now received approval from the China Securities Regulatory Commission to issue up to 29.13 million overseas ordinary shares and convert 43.99 million unlisted shares for circulation in Hong Kong [2]. - The acceptance of family-owned and franchise-driven traditional consumer goods companies is reportedly higher in the Hong Kong market compared to A-shares, as evidenced by the successful listing of Lincang Ancient Tea [4]. Group 2: Franchise Structure and Financial Performance - As of September 2024, Baima Tea operates 3,498 stores nationwide, with 92.1% being franchise stores, contributing approximately 50% of total revenue [5]. - The revenue from franchise channels for the years 2022 to the first nine months of 2024 was 912 million, 1.073 billion, and 819 million respectively, maintaining a stable contribution to total revenue [5]. - The gross margin for franchise channels was significantly lower at 46% compared to 78.2% for direct sales in the first nine months of 2024 [5]. Group 3: Family Ownership and Governance Issues - The Wang family holds 55.9% of the voting rights, indicating a highly concentrated family ownership structure typical of family businesses [7]. - The management team is predominantly composed of family members, which raises concerns about governance and transparency in decision-making [7][8]. - The family governance model may pose challenges in maintaining operational independence and stability as the company scales and faces increased scrutiny post-IPO [8]. Group 4: Market Position and Industry Dynamics - The capital market shows a stark contrast in preference between traditional tea companies and new tea beverage brands, with only a few tea companies successfully listed [9]. - Baima Tea's market share in the high-end tea market is only 1.7%, significantly lower than leading new tea beverage companies [9]. - The tea industry is characterized by low standardization and a perception that tea is primarily consumed by older generations, which may hinder Baima's appeal to younger consumers [9].