Summary of Cha Ji Company Conference Call Company Overview - **Company**: Cha Ji Company - **Industry**: Tea and Beverage Key Financial Metrics - Total net revenue for Q3 2025 decreased by 9.4% year-over-year to **32.083 billion RMB** [2] - Non-GAAP net profit margin was **15.7%**, indicating profitability [2] - Global tea house network expanded to **7,338 locations**, with **300 new openings** including **54 overseas** [5] - Overseas market GMV grew by **75.3%** to **300.3 million RMB** [2] - Total GMV in Greater China decreased by **6.2%** to **7,629.2 million RMB** [5] - Average monthly GMV per tea house was **378,506 RMB** [5] - Total registered members reached **222 million**, a **36.7%** increase year-over-year [7] Strategic Initiatives - **High-Quality Development Strategy**: Focused on four dimensions: brand, product, experience, and channel [3] - Brand: Creating value through tea culture and expanding user base [3] - Product: Prioritizing product excellence and upgrading raw materials [3] - Experience: Creating engaging content and emotional connections [3] - Channel: Emphasizing store quality and sustainable growth [3] Product Innovation - Launched low-caffeine Jasmine Green Tea Latte and Bo Ya Jasmine Green Milk Tea, the latter winning the **World Beverage Innovation Award** [2][6] - PG Oolong Milk Tea performed well in the Asia-Pacific region [6] Membership and Franchise Network - Membership ecosystem showed strong growth with a **1.5 million** increase in members quarter-over-quarter [7] - Franchise network stability reflected by a low store closure rate of **0.3%** for three consecutive quarters [7] Future Growth Expectations - Short-term same-store sales growth expected to face pressure, but long-term outlook remains optimistic [8] - Continued focus on product innovation and brand investment, alongside operational efficiency improvements [8] - Board approved a special cash dividend of **92 cents per share**, totaling approximately **$177 million**, to be paid on December 15, 2025 [8] Brand and Market Expansion - Upgrading brand experience through T House and specialized tea culture theme stores [9] - Successful overseas market expansion into the Philippines and Vietnam, with over **200 stores** in Malaysia [4][14] - Localized products and marketing strategies have shown success in Southeast Asia [15] Channel Strategy - Strong channel strategy with **300 new store openings** this quarter [13] - Highlight stores like Hong Kong Super Tea Restaurant and pop-up stores during the Shanghai Master Competition to enhance brand visibility [13] Product Quality and Consumer Experience - Implementing a **4.0 upgrade** for product quality, including strict standards and improved core materials [10] - Expanding product categories and enhancing customer experience through new consumption scenarios [11] - Optimizing membership system to increase member engagement and repeat purchase rates [12]

Summary of BaWang Tea Ji Conference Call Company Overview - **Company**: BaWang Tea Ji - **Industry**: Beverage (Tea) Key Financial Performance - **Net Revenue**: 50.028 billion RMB under non-GAAP, with a net profit margin of 15.7% [2][3] - **Total GMV**: 79.295 billion RMB for Q3 2025 [3] - **Total Net Income**: 32.08 billion RMB for Q3 2025, a decrease of 9.4% year-over-year and 3.7% quarter-over-quarter [3][9] - **Gross Profit**: 17.265 billion RMB with a gross margin of 53%, an improvement from 50% year-over-year [4][9] Market Expansion - **Global Store Network**: Expanded to 7,300 stores, with 300 new stores added in Q3 2025, including 54 overseas [2][3] - **Overseas Market Growth**: GMV increased by 75.3% year-over-year and 27.7% quarter-over-quarter to 3.003 billion RMB [2][7] - **New Markets**: Successfully entered the Philippines and Vietnam, with ongoing expansions in Malaysia, Thailand, and Indonesia [2][7] Product Innovation - **New Product Launches**: Plans to introduce low-caffeine jasmine green tea latte, expected to be a top seller [2][4] - **Awards**: BoYa Jasmine Green Milk Tea won the 2025 World Beverage Innovation Award for Best Natural or Organic Drink [4] - **Regional Product Strategy**: PG Oolong Milk Tea performed well, validating the effectiveness of regional product strategies [5] Membership and Franchise Network - **Registered Members**: Total of 222 million members as of Q3 2025, an increase of 15 million quarter-over-quarter and 36.7% year-over-year [2][6] - **Franchise Stability**: Store closure rate maintained at a low of 0.3% for three consecutive quarters, indicating strong confidence among franchise partners [6] High-Quality Development Strategy - **Strategic Focus Areas**: - **Brand**: Upgrading brand and launching themed stores - **Product**: Implementing Product 4.0 upgrades to enhance quality and core ingredients - **Experience**: Innovating across categories and reshaping the membership system - **Channel**: Expanding global network and promoting flagship store development [2][8] Additional Insights - **Domestic Market Performance**: In the Asia-Pacific region, net revenue was 32.083 billion RMB, with franchise tea shop revenue accounting for 87.6% and self-owned tea shop revenue growing by 63.8% to 3.967 billion RMB [4][9] - **Challenges**: Despite the overall decline in the Greater China region's GMV by 6.2% to 76.292 billion RMB, the company continues to show resilience and growth in overseas markets [4][9]

Financial Data and Key Metrics Changes - Total net revenue for Q3 2025 was ¥3,208.3 million, a decrease of 9.4% year-over-year and 3.7% sequentially [11] - Total GMV for the quarter was ¥7,929.5 million, reflecting challenges in the macro environment and competition [11] - Non-GAAP net income was ¥502.8 million, with a non-GAAP net margin of 15.7%, down from 18.3% the previous year [12] Business Line Data and Key Metrics Changes - Net revenue from franchisee tea houses was ¥2,811.6 million, accounting for 87.6% of total net revenue [11] - Net revenue from company-owned tea houses increased by 63.8% to ¥396.7 million, representing 12.4% of total revenue [11] - The average monthly GMV per tea house in Greater China was ¥378,506, showing a year-over-year decline [11] Market Data and Key Metrics Changes - GMV in Greater China decreased by 6.2% year-over-year to ¥7,629.2 million [11] - Overseas markets showed substantial progress, with GMV increasing 75.3% year-over-year to ¥300.3 million [11] - The company added a net 54 stores overseas, bringing the total to 262 stores as of September 30, 2025 [11] Company Strategy and Development Direction - The company focuses on high-quality development, emphasizing user value and community building [6][8] - Strategic expansion includes entering new markets like the Philippines and Vietnam, while maintaining a healthy pace of store openings [11][13] - The company aims to enhance product quality and user experience, moving beyond beverages to create distinctive cultural experiences [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the global tea beverage market's potential and the company's unique cultural and quality-driven path [8] - The company is committed to maintaining premium brand integrity despite competitive pressures [11] - Future strategies include product innovation, operational efficiency, and enhancing market presence [12][13] Other Important Information - The company achieved its 11th consecutive quarter of profitability, with GAAP net income of ¥397.9 million [12] - A special cash dividend of $0.92 per ordinary share was approved, totaling approximately $177 million [12] - The company ended the quarter with roughly ¥9,142 million in cash and cash equivalents, providing a solid financial foundation [12] Q&A Session Summary Question: How will the high-quality development strategy be executed? - The strategy will focus on brand building, product quality, customer experience, and channel expansion [13] Question: Can you share more about the overseas market network expansion? - The company entered the Philippines and Vietnam, with strong local operations and successful product launches in Southeast Asia [13]