Once hailed as the global leader in the new-style tea beverage sector upon its 2021 Hong Kong listing, NAYUKI (HKG: 2150) commanded significant investor enthusiasm with an IPO price of HK$19.8 per share.
However, in just five years, this former industry benchmark has plummeted to penny stock status, trading below HK$1, representing a staggering loss of over 96% from its offering price and leaving its market capitalization at a mere HK$1.136 billion.
The company has reported losses in four out of its five full fiscal years since going public, with the 2025 fiscal year still failing to turn a profit, placing it at the bottom among listed tea chains and completely out of the top industry tier.
This persistent operational weakness and capital market collapse have drawn intense scrutiny to the company's management.
At a recent shareholders' meeting, a young investor pointedly questioned why the founders do not adopt a symbolic HK$1 annual salary, tying their compensation directly to performance, as seen at many other companies, given the continuous losses.
Data shows that the combined remuneration for Chairman Zhao Lin and General Manager Peng Xin, the founding couple, reached HK$3.1 million in 2025.
In response, the company stated that the founders have not sold any shares since the IPO nor profited from stock sales, relying solely on salaries for operations, making a HK$1 salary unrealistic.
A comparison with five other listed new tea beverage companies in Hong Kong highlights a stark contrast.
Competitors like Mixue, Guming, Chabaidao, and Auntie Shanghai have all achieved stable profitability, with most founders voluntarily reducing their pay, while the persistently loss-making NAYUKI maintains high executive compensation, fueling further market debate.
Even repeated share buyback initiatives, including a concentrated effort to repurchase shares worth tens of millions of Hong Kong dollars in June 2026, have failed to stem the sharp decline in its stock price.
The competitive landscape has now been completely reshaped, with a clear top tier establishing strong barriers, leaving NAYUKI thoroughly marginalized.
In terms of market value, Mixue and Guming firmly lead the first tier with valuations of HK$87 billion and HK$51.6 billion respectively, followed by Auntie Shanghai and Chabaidao, while NAYUKI's sub-HK$12 billion valuation represents a vast gap.
Regarding store network, Mixue ended 2025 with over 55,000 outlets and Guming with more than 13,000, rapidly capturing lower-tier markets through a franchise model.
In contrast, NAYUKI's total store count remains just over 2,000, with a net addition of only 13 franchised stores for the entire year, indicating its expansion has fallen completely behind.
The core issue behind NAYUKI's decline lies in a severe misalignment between its business model and industry trends.
Initially, the brand built a premium image with an average ticket price around HK$43, relying on a direct-operated, large-store model in prime locations of major cities to create an offline "third space" experience, which quickly gained traction.
However, as market dynamics shifted rapidly from expansion to intense competition within a saturated market, industry growth slowed significantly, and value-for-money became the primary consumer demand.
Data indicates over 70% of consumers prefer mid-range tea beverages priced between HK$11 and HK$25, leaving a very limited audience for the premium segment.
To adapt, NAYUKI was forced into price wars, launching several budget-friendly products, but the inherent flaws of its long-term, capital-intensive direct-operation model were fully exposed.
Pre-opening investment for a single NAYUKI store exceeds HK$1 million, far above the industry average of HK$300,000 to HK$500, while fixed costs for rent, labor, and equipment remain high.
Simultaneously, consumption habits have fundamentally changed, with new tea drinks becoming grab-and-go fast-moving consumer goods.
In 2025, delivery orders accounted for over 52.6% of NAYUKI's revenue, meaning consumers are no longer willing to pay a premium for the large-store experience, leaving the high costs unabsorbed and trapping the company in a dilemma of losing money on lower prices or losing customers with higher ones.
Amid an industry-wide push into lower-tier markets via rapid franchise-led scaling, NAYUKI's transformation has been critically delayed.
Its prolonged adherence to a pure direct-operation model caused it to miss the window for the下沉 market, and its later, rushed move to open franchising came too late to capture market leadership.
In attempts to reverse its fortunes, the company has frequently rebranded, followed trends into areas like light meals and bottled tea, but these are largely reactive measures lacking a core competitive edge.
Compounded by frequent food safety complaints, an exodus of senior executives, and an underdeveloped supply chain, the brand's decline appears difficult to reverse.
Today, NAYUKI is caught in a dual trap: constrained by its premium positioning and squeezed by the value-focused market.
Its once-prized premium large-store model has become the biggest drag on performance, while delayed strategic adjustments and an inflexible operational approach have caused it to completely miss out on industry growth.
Moving forward, the key to escaping persistent losses and rejoining the industry mainstream will depend on its ability to optimize cost structures, address its scale disadvantage, and precisely redefine its brand positioning.
Comments