Core Insights - Chagee Holdings is committed to maintaining its focus on premium products despite declining sales and profits, opting not to engage in price wars with competitors [1][6] - The company's second-quarter sales growth has slowed to 10%, down from 35% in the previous period, and adjusted operating income has dropped by 10% [3] Pricing Strategy - Chagee Holdings has chosen to stick to its pricing strategy amidst increasing competition from domestic companies like Luckin Coffee and Mixue Group, which offer heavily discounted beverages [1][3] - The company aims to build a premium brand rather than compete on price [1][6] Product Offerings - The flagship store in Hong Kong features drinks made from premium Chinese tea leaves, brewed in-store by specialists, with prices comparable to single-origin coffee at Starbucks Reserve outlets, ranging from HKD40 to HKD50 (US$5.2-6.4) [2][7] Sales Performance - The company's second-quarter sales growth has significantly slowed, resulting in a loss of nearly a quarter of its market value [3] - Despite the weak performance, Chagee remains optimistic and is not deterred by decreased competitiveness [3] Expansion Plans - Chagee opened its first U.S. store in Los Angeles in May and operates over 200 international outlets as part of a network exceeding 7,000 stores [5][8] - The company reported a 70% increase in overseas sales in the second quarter, with a focus on expanding in Southeast Asia [5][8] Future Strategy - Chagee plans to follow a development path similar to that of Starbucks, aiming to elevate the tea experience [4][8]