Core Insights - The ready-to-drink tea market is showing signs of recovery, with a total of 122,027 stores as of July 2025, an increase of 5,049 stores from June, despite a month-on-month decrease in new store openings [1][3]. Store Opening Performance - In July, 2,597 new stores were opened, a decrease of 16.70% month-on-month and a decline of 22.29% year-on-year [1][2]. - The leading brand, Mixue Ice City, opened 950 new stores in July, maintaining a strong expansion despite a gradual decline in monthly openings over the past three months [3][4]. - Gu Ming opened 316 new stores in July, marking a year-on-year increase of 90.68%, attributed to market recovery and adjusted expansion strategies [3][4]. - Other notable brands include Hu Shang A Yi with 265 new stores, Tian La La with 194, and Wei Li Nai Bai with 113 [3][4]. Competitive Landscape - The industry is characterized by contrasting strategies of expansion and contraction among brands. Gu Ming and Hu Shang A Yi are expanding rapidly, while brands like Cha Bai Dao are experiencing a decline in store numbers [6][4]. - The total number of stores for Cha Bai Dao has decreased from 8,449 to 7,750 over the past year, indicating a net reduction of 699 stores [6]. Product Innovation - In July, the total number of new product launches decreased significantly to 86 SKUs from 124 in June, reflecting a shift in focus among brands [6][8]. - Gu Ming and Mei Suan Nai launched the highest number of new products, with 9 SKUs each, while other brands like Cha Bai Dao and Nai Xue's Tea followed closely with 8 SKUs [6][8]. Seasonal Trends and Collaborations - The product focus for July included refreshing and healthy beverages, with many brands introducing seasonal fruit flavors such as green grapes, apples, and peaches [9][10]. - A total of 12 brands engaged in 18 collaborative marketing activities in July, maintaining the same level of engagement as in June, indicating a trend towards diverse and frequent collaborations [10][11]. - Collaborations have expanded beyond traditional media to include cultural and public institutions, enhancing brand visibility and engagement with different consumer segments [10].

Investment Highlights - Company is rated as outperforming the industry with a target price of HKD 12.00, based on a relative P/E valuation method corresponding to 19/15 times earnings for 2025/26 [1] - The ready-to-drink tea market is expected to maintain rapid growth, with a market size of RMB 258.5 billion in 2023 and a CAGR of 19% over the past five years, projected to continue high growth from 2024 to 2028 [1] - The industry remains fragmented with a CR5 of 46.8%, indicating room for leading brands to increase market penetration [1] Company Overview - Company ranks third in China's ready-to-drink tea market with a market share of 6.8% in 2023, rapidly expanding its store network through a franchise model, aiming for 8,395 stores by the end of 2024 with a CAGR of 68.4% from 2020 to 2024 [2] - The company has a balanced and diverse product matrix, with approximately 40% of sales from classic products and 60% from seasonal and new tea drinks, boasting over 139 million registered members by the end of 2024 [2] - The company benefits from a robust supply chain and a systematic franchise management system, supporting its nationwide expansion and efficient store operations [2] Performance Outlook - The company is expected to achieve a recovery in performance in 2025, with same-store sales growth and franchisee profitability anticipated to stabilize from Q2 2025 onwards after adjustments in store opening pace and store efficiency in 2024 [2] - Earnings per share (EPS) are projected to be RMB 0.59 and RMB 0.72 for 2025 and 2026 respectively, with a CAGR of 50% [3] - The company is currently trading at 14/12 times earnings for 2025/26, with a target price reflecting a 32% upside potential [3] Market Differentiation - The company distinguishes itself from market concerns regarding same-store sales sustainability by enhancing its new product development, category extension, and marketing capabilities, indicating a sustainable growth trajectory [3] - Potential catalysts for growth include same-store sales growth, new product development, and supply chain enhancements [3]

Core Insights - The company reported strong performance in H1 2025, with revenue reaching 5.663 billion yuan, a year-on-year increase of 41.2%, and net profit attributable to shareholders at 1.626 billion yuan, up 121.5% [1] - Adjusted net profit, excluding the impact of fair value changes from preferred shares and listing expenses, was 1.086 billion yuan, reflecting a 42.4% year-on-year growth [1] - The company is expanding its store network aggressively, with a total of 11,179 stores by the end of H1 2025, a 17.5% increase year-on-year [1] Business Performance - Revenue from product sales and equipment reached 4.496 billion yuan, a 42% increase year-on-year, accounting for 79% of total revenue [1] - Franchise management service revenue was 1.159 billion yuan, up 39% year-on-year, making up 20% of total revenue [1] - Direct store sales were 0.08 billion yuan, reflecting a 14% year-on-year increase [1] Store Expansion - The company opened 1,570 new stores in H1 2025 while closing 305, indicating a steady expansion of its store network [1] - The company is focusing on penetrating lower-tier markets, which presents significant growth potential [1] Operational Improvement - Total GMV for H1 2025 was 14.094 billion yuan, a 34% year-on-year increase, with average daily GMV per store at 7,600 yuan, up 21% [1] - The average daily cup sales per store reached 439 cups, a 17% increase year-on-year, with an average cup price of 17.25 yuan, up 3% [1] - The company has optimized its brand matrix, with registered members reaching 178 million and quarterly active members at 50 million [1] Profit Forecast and Investment Rating - The company is expected to accelerate market share capture due to its expanding store network and improving same-store performance [1] - Profit forecasts for 2025-2027 have been raised, with net profits projected at 2.685 billion, 2.495 billion, and 2.881 billion yuan respectively, corresponding to PE ratios of 19, 20, and 18 times [1] - The investment rating is maintained at "Buy" [1]

Core Viewpoint - CICC has initiated coverage on Cha Bai Dao (02555) with an "outperform industry" rating and a target price of HKD 12, based on a relative valuation method with projected P/E ratios of 19x and 15x for the next two years [1] Company Summary - CICC forecasts that Cha Bai Dao's earnings per share will be RMB 0.59 and RMB 0.72 for the next two years, representing a compound annual growth rate of 50% [1] - The company is expected to achieve significant performance growth through continuous store expansion, supported by a balanced product matrix and store layout [1] - Cha Bai Dao has established a comprehensive franchise management system, which includes franchisee selection, store location, new store guidance, and operational management [1] Industry Summary - The ready-to-drink tea industry is anticipated to maintain rapid growth, with the mainstream market segment priced between RMB 10 to 20 [1] - Industry leaders are expected to continue expanding their market share due to economies of scale [1] - Cha Bai Dao's core competitive advantages include a diverse and balanced product matrix that continues to attract consumers, as well as supply chain capabilities that support a nationwide balanced layout [1]

Group 1 - The core viewpoint of the report is that Tea Baidao (02555) is expected to achieve good performance growth through continuous store expansion, supported by a balanced product matrix and store layout [1] - The target price for Tea Baidao is set at HKD 12, based on a relative valuation method with forecasted price-to-earnings ratios of 19 times and 15 times for the next two years [1] - The estimated earnings per share for Tea Baidao are projected to be RMB 0.59 and RMB 0.72 for the next two years, indicating a compound annual growth rate of 50% [1] Group 2 - The ready-to-drink tea industry is expected to maintain rapid growth, with the mainstream market being dominated by the price range of RMB 10 to 20 [1] - Industry leaders are anticipated to continue expanding their market share due to economies of scale [1] - Tea Baidao's core competitive advantages include a balanced and diverse product matrix, strong supply chain capabilities supporting nationwide layout, and a systematic franchise management system that aids in stable store expansion [1]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company achieved a revenue of 5.663 billion CNY in the first half of 2025, representing a year-on-year increase of 41.2%, and a net profit of 1.625 billion CNY, up 121.5% year-on-year [5] - The company has accelerated its store opening pace, with a total of 11,179 stores as of the end of the first half of 2025, netting an increase of 1,265 stores [6] - The gross merchandise volume (GMV) reached 14.094 billion CNY, a year-on-year increase of 34.3%, with a cup sales volume of 817 million cups, up 30.1% year-on-year [5][6] Revenue Performance - The company’s revenue from sales of goods and equipment, franchise management services, and direct store sales for the first half of 2025 were 4.496 billion CNY, 1.159 billion CNY, and 0.08 billion CNY respectively, with year-on-year growth rates of 41.8%, 39.2%, and 14.0% [5] Store Expansion - The company opened 1,570 new stores and closed 305, resulting in a net increase of 1,265 stores in the first half of 2025, with a faster expansion rate compared to the first half of 2024 [6] Profitability Improvement - The gross profit margin for the first half of 2025 was 31.5%, a slight decrease of 0.1 percentage points year-on-year, while the operating profit margin increased by 1.6 percentage points to 23.7% [7] - The net profit margin increased by 10.4 percentage points year-on-year to 28.7% [7] Market Trends - The company benefited from a surge in demand in the tea beverage industry due to promotional activities from major e-commerce platforms, which significantly boosted order volumes [8] - The company is actively expanding its coffee product line, leveraging its supply chain and operational capabilities to introduce high-value coffee products [8] Financial Forecasts - The company’s projected net profits for 2025, 2026, and 2027 are 2.660 billion CNY, 2.588 billion CNY, and 3.067 billion CNY respectively, with corresponding EPS of 1.12 CNY, 1.09 CNY, and 1.29 CNY [9][10]

Core Viewpoint - The mid-year performance report of Nayuki Tea shows significant improvement in key metrics, indicating the success of its health strategy and operational efficiency [1][3][11] Financial Performance - Adjusted net loss narrowed by 73.1% year-on-year, from 438 million to 117 million [1][11] - Operating cash flow increased by 33.1% year-on-year to 138 million [1][3] - Cash on hand as of June 30 reached 2.79 billion, indicating strong financial stability [3] Sales and Operational Metrics - Average daily sales per store increased by 4.1% compared to the same period in 2024 [3] - Daily order volume rose from 265.9 to 296.3, a year-on-year increase of 11.4% [3] - Directly operated same-store sales grew by 2.3% to 1.76 billion [3] - New first-tier cities saw average daily sales per store increase by over 9% [3] Membership and Customer Engagement - Registered membership increased to 111 million, with 8.3 million new members, predominantly young consumers [3][11] - Consumption scenarios have shifted from "immediate thirst" to "daily light nutrition" [3] Product Strategy and Market Positioning - The "No Sugar Natural Nutrition+" initiative was launched in collaboration with various organizations, marking a shift in the industry towards natural nutrition [4] - The "Little Purple Bottle" series achieved over 500,000 sales within three days of launch, indicating strong market acceptance [6] - The introduction of "Nayuki Green" stores extends consumption scenarios to breakfast, lunch, and afternoon tea, with significant sales performance [8] Strategic Directions - The company plans to optimize the "Nayuki Green" store model and explore new consumption scenarios in office and community areas [9] - Focus will remain on health-centric products, leveraging the "Natural Nutrition+" plan to introduce more health products using "super ingredients" [9] - The company aims to enhance its digital membership strategy and accelerate overseas market expansion [9]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company's performance exceeded expectations with a revenue of 5.663 billion yuan in H1 2025, representing a year-on-year increase of 41.2%, and a net profit of 1.626 billion yuan, up 121.5% year-on-year [7] - The company is experiencing growth across all business lines, with product sales and equipment revenue reaching 4.496 billion yuan, a 42% increase year-on-year, accounting for 79% of total revenue [7] - The company is accelerating its store expansion, with a total of 11,179 stores as of the end of H1 2025, a 17.5% increase year-on-year [7] - Single-store operations have improved, with average daily GMV of 7,600 yuan, a 21% increase year-on-year, and a total GMV of 14.094 billion yuan, up 34% year-on-year [7] - The company is expected to capture more market share due to its regional expansion, product innovation, and self-built supply chain, leading to an upward revision of profit forecasts for 2025-2027 [7] Financial Projections - Total revenue projections for 2023A, 2024A, 2025E, 2026E, and 2027E are 7.676 billion, 8.791 billion, 12.315 billion, 13.576 billion, and 15.590 billion yuan respectively, with year-on-year growth rates of 38.07%, 14.54%, 40.08%, 10.24%, and 14.83% [1] - Net profit projections for the same years are 1.080 billion, 1.479 billion, 2.685 billion, 2.495 billion, and 2.881 billion yuan, with year-on-year growth rates of 194.48%, 36.95%, 81.61%, (7.09)%, and 15.47% [1] - The latest diluted EPS for 2025E is projected at 1.13 yuan, with a P/E ratio of 19.02 [1]

Core Insights - The company believes that second-tier and lower-tier cities, as well as towns in various city levels, represent a vast untapped market with significant potential [2] - The number of stores in second-tier and lower-tier cities accounted for 81% of the total store count, showing a slight increase from 79% as of June 30, 2024 [2] - The proportion of stores located in towns, which are typically administrative areas away from city centers, increased from 39% to 43% year-on-year, indicating the company's capability to deepen its presence in China's lower-tier markets [2] Store Expansion and Performance - The company opened 1,570 new stores during the first half of the year, with a total of 11,179 stores by June 30, 2025 [1] - The store closure count was slightly higher due to some franchisees deciding to close stores based on performance, location, or personal circumstances [2] - The company actively discussed with franchisees to close underperforming stores that did not meet operational standards or were in less favorable locations [2] Financial Performance - The total GMV (Gross Merchandise Value) reached approximately 14.09 billion RMB, with a single store GMV of about 1.37 million RMB [1] - The average daily GMV per store was around 7,600 RMB, while the total number of cups sold reached approximately 816,895 thousand cups [1] - Compared to the first half of 2024, there was an increase in single store GMV, average daily GMV, cups sold per store, and average daily cups sold per store, benefiting from effective product and marketing strategies [2]

Core Insights - The company reported a revenue growth of 41.2% to 5.663 billion RMB for the first half of 2025, with a significant increase in net profit attributable to shareholders by 121.5% to 1.625 billion RMB [1] - The store network expanded to over 11,179 locations across more than 200 cities in China, marking a 17.5% increase from the previous year [1] Store Network Expansion - As of June 30, 2025, the total number of stores reached 11,179, with 1,570 new stores opened during the period [2] - The distribution of stores includes 318 in first-tier cities, 1,812 in new first-tier cities, and 9,049 in second-tier and below cities, with the latter representing 81% of total stores [2] - The proportion of stores located in towns and rural areas increased from 39% to 43% compared to the previous year, indicating a strategic focus on lower-tier markets [5] Sales Performance - The total Gross Merchandise Value (GMV) reached approximately 14.094 billion RMB, with an average GMV per store of 1.371 million RMB [4] - The average daily GMV per store was reported at 7,600 RMB, with total cups sold amounting to approximately 816,895 thousand cups [4] - The company experienced increases in single-store GMV, average daily GMV, and total cups sold compared to the first half of 2024, reflecting effective product and marketing strategies [5]