Core Viewpoint - Bawang Chaji is set to go public on NASDAQ on April 17, 2024, with an expected IPO fundraising amount between $380 million and $410 million, facing challenges from market conditions and operational performance [1][2]. Group 1: IPO Details - Bawang Chaji plans to issue approximately 14.68 million American Depositary Shares (ADS) at a price range of $26 to $28, potentially valuing the company at over $4.7 billion if priced at $28 [1]. - Key cornerstone investors include Dinghui Investment, RWC, Allianz, and ORIX Asia, collectively purchasing about $205 million worth of ADS, representing 51.7% of the total issuance [1]. Group 2: Market Challenges - The company faces significant market challenges, particularly due to the recent downturn in the U.S. restaurant sector, with major brands like Starbucks and McDonald's experiencing stock price declines [2]. - Analysts express concerns that the current market conditions may affect investor confidence and valuation estimates for Bawang Chaji's IPO [2]. Group 3: Operational Performance - Bawang Chaji's store count increased by 83.4% from 3,511 at the end of 2023 to 6,440 by the end of 2024, but the average monthly GMV per store decreased from 574,000 yuan in 2023 to 456,000 yuan in Q4 2024, a decline of 18.4% [4]. - The company reported significant declines in GMV growth rates in key regions, with declines of 27.3% in East China and 14.7% in South China, where store density is highest [5]. Group 4: Franchisee Concerns - Franchisees express anxiety over rising fixed costs, such as rent, amid declining sales, leading to fears of potential losses and a reluctance to open new stores [5]. - The company has relaxed its store opening standards, which may not be sufficient to encourage franchisees to invest further in new locations [5]. Group 5: Product Dependency - Bawang Chaji heavily relies on its top-selling SKU, "Boya Juexian," which contributes 35% of its GMV, indicating a vulnerability compared to competitors like Luckin Coffee and Mixue Bingcheng, which do not have a single SKU contributing over 30% [6]. - The company plans to allocate a significant portion of its IPO proceeds to supply chain, research and development, and digitalization efforts, signaling a shift towards a more focused operational strategy post-IPO [6].