InvestIdeas

Funds affiliated with CDH Investment Management Co, RWC Asset Management and RWC Asset Advisors (US), Allianz Global Investors Asia Pacific Ltd and ORIX Asia Asset Management Ltd indicated interest in buying as much as US$205 million worth of ADS in aggregate at the IPO price.

Chagee’s network comprised 6,440 tea houses as of December 2024, with the number growing approximately 83% year over year.

Founder and chief executive officer Junjie Zhang, who started the company in 2017, is set to have 89% of the aggregate voting power after the offering, according to the filing.

Chagee’s IPO is being led by Citigroup Inc, Morgan Stanley, Deutsche Bank AG and China International Capital Corp, the filing shows.

The shares are expected to trade on the Nasdaq Global Select Market under the symbol CHA.

Premium tea-drinks, with an average price of 17 yuan (S$3.10) per cup, represented 26 per cent of the China market last year versus 11 per cent in 2019.

Chagee has a network of over 6,440 shops, with the vast majority of them located in China and a presence abroad in Malaysia, Singapore and Thailand.

Around 6,270 of the teahouses are franchised and 169 are company-owned.

The company operated 156 stores overseas by the end of 2024. It plans to open 1,000 to 1,500 new stores globally this year.

As of the end of 2024, Chagee operated 6,440 stores worldwide — 6,217 of which were franchises — representing an 83 percent increase from the previous year.

Its 2024 GMV (Gross Merchandise Volume) surged 173 percent year-on-year to 29.5 billion yuan ($4.04 billion), with average monthly GMV per store in China hitting 5.12 million yuan.

Its annual revenue reached 12.41 billion yuan, while net profit came in at 2.52 billion yuan — translating to a net margin of 20.3 percent, significantly above the industry average.

Same-store GMV growth slowed in the second half of 2024, declining 18.4 percent year-on-year in the fourth quarter. Analysts attribute the slowdown in part to market cannibalization from the rapid opening of new stores in the same areas.

56% of revenue comes from membership-driven sales, managed by our 300-member backend team.

40% of sales come from delivery platforms.

Piece-rate pay system: Employees earn commissions for each scan, making the process straightforward—each scan earns 1 yuan.

Performance assessment based solely on customer satisfaction.

Mentorship system inspired by Haidilao: Store managers and their apprentices hold shares, ensuring that the final decision-makers at the store level are also stakeholders.

As of March 31, 2025, the Company operated a total of 6,681 teahouses in Greater China and overseas, representing 63.6% growth in the number of teahouses from March 31, 2024.

Total GMV generated in the first quarter of 2025 was RMB8,226.8 million, representing a 38.0% increase from the same quarter of 2024

Chagee’s Mobile Mini Program had a total of 192.4 million registered members as of March 31, 2025, representing 109.6% growth

Chagee had 44.9 million active members in the first quarter of 2025, representing a 21.4% year-over-year increase.

Net revenues increased by 35.4% to RMB3,392.7 million (US$467.5 million) from RMB2,506.6 million in the same quarter of 2024.

Net income increased by 13.8% to RMB677.3 million (US$93.3 million)

Basic and diluted net income per ordinary share was RMB3.92 (US$0.54), compared to RMB3.32 in the same quarter of 2024.

Cash and cash equivalents, restricted cash, and time deposits were RMB5,392.4 million (US$743.1 million) as of March 31, 2025, compared to RMB4,868.7 million as of December 31, 2024.

As of June 30, 2025, there were 7,038 teahouses within the Company’s teahouse network in Greater China and overseas, representing a 40.9% increase in the number of teahouses as of June 30, 2024.

Net revenues increased by 10.2% to RMB3,331.9 million (US$465.1 million) from RMB3,023.3 million

GAAP net income decreased by 87.7% to RMB 77.2 million (US$10.8 million) from RMB628.7 million in the same quarter of 2024.