Core Viewpoint - The article highlights a significant transformation in the Chinese tea beverage market, contrasting the declining performance of traditional brands like Xiangpiaopiao with the rapid growth of new tea drink companies such as Mixue Ice City and Guming, indicating a shift in consumer preferences from instant tea to freshly made tea drinks [4][12]. Group 1: Xiangpiaopiao's Challenges - Xiangpiaopiao, once a leading brand in the instant tea market, reported a revenue of 1.035 billion yuan in its half-year report, a year-on-year decline of 12.21%, and a net profit loss of 97 million yuan, a staggering drop of 230.13% [6]. - The decline is primarily attributed to a 31.04% drop in sales revenue from its instant tea products, which has significantly impacted overall performance [6]. - In response to these challenges, Xiangpiaopiao is attempting to reposition its brand towards younger and health-conscious consumers by launching new products like "original leaf freshly brewed milk tea" and "ancient five red warm milk tea" [6][10]. Group 2: Growth of Freshly Made Tea Brands - In contrast, new tea drink companies such as Mixue Ice City, Guming, and others have shown remarkable growth, with a combined revenue exceeding 33 billion yuan and a total net profit of over 5 billion yuan in the first half of the year [12]. - Mixue Ice City achieved a revenue of 14.87 billion yuan, a year-on-year increase of 39.3%, and a net profit of 2.72 billion yuan, up 44.1% [12]. - Guming also reported impressive growth, with a revenue of 5.363 billion yuan, a 41.2% increase, and a net profit surge of 121.51% [12]. Group 3: Market Dynamics and Consumer Preferences - The tea beverage industry is experiencing a shift towards health and freshness, with consumers increasingly prioritizing product ingredients and health benefits, leading to a rise in fresh fruit and vegetable drinks [17]. - The competition is intensifying as freshly made tea brands establish robust supply chains, with Mixue Ice City achieving 100% self-sourcing of core ingredients and Guming providing rapid cold chain delivery to 98% of its stores [19]. - The integration of online and offline channels is becoming crucial for brand expansion, as consumers view tea drinks not just as beverages but as social and emotional experiences [18].

Core Viewpoint - Hu Shang A Yi is launching an IPO in Hong Kong, aiming to raise funds for digital capabilities, supply chain improvements, and brand expansion amidst a competitive tea beverage market [2][5][21] Company Overview - Hu Shang A Yi plans to globally offer approximately 2.41 million H-shares at a price range of HKD 95.57 to HKD 113.12 per share, with trading expected to start on May 8 [4][5] - The company is the fifth largest tea beverage brand in China, holding a market share of 4.6% as of 2023 [2] - Founded in 2013, Hu Shang A Yi offers a variety of products, including fruit teas and milk teas, and has developed a brand matrix including sub-brands [6] Financial Performance - For 2024, Hu Shang A Yi projects revenue of CNY 3.285 billion, a year-on-year decline of 1.88%, with net profit expected to be CNY 329 million, down 15.21% [8][7] - The company's adjusted net profits from 2022 to 2024 were CNY 154 million, CNY 416 million, and CNY 418 million respectively [8] - The gross margin has improved from 26.7% in 2022 to 31.3% in 2024 [12] Market Position and Competition - The tea beverage market is experiencing intensified competition, with brands competing on store numbers, brand effects, and supply chain capabilities [3][21] - Hu Shang A Yi's revenue growth has slowed, with a significant reliance on franchise income, which accounted for over 95% of total revenue in 2024 [13][14] - The average annual GMV per store decreased from CNY 1.6 million in 2023 to CNY 1.4 million in 2024, indicating increased operational pressure [17][16] Store Expansion and Challenges - As of December 31, 2024, Hu Shang A Yi operated 9,176 stores, a 17.8% increase year-on-year, but the pace of new store openings has slowed significantly [18][19] - The company added 1,387 new stores in 2024, which is about half of the previous year's additions [18] - The distribution of stores shows that over 50% are located in third-tier cities and below, reflecting a strategic focus on these markets [19] Industry Trends - The new tea beverage market's growth rate is expected to decline from 44.3% in 2023 to 12.4% by 2025, indicating a potential slowdown in overall market expansion [20] - The industry is facing challenges such as price wars and a lack of significant differentiation among brands, which may impact long-term sustainability [21]