In October 2025, BAMA TEA, hailed as the "first stock of premium Chinese tea," successfully listed on the Hong Kong Stock Exchange. Initially, its stock performance was strong, surging 87% on its debut to HKD 93.35 per share. However, the optimism was short-lived; just over a month after listing, its stock price reversed course and fell below the issue price. By the market close on January 9, 2026, the company's share price had plummeted to HKD 29.12, even hitting a new intraday low of HKD 29.04. Behind this dramatic shift in investor sentiment and the widespread vote of no confidence, what underlying operational concerns does BAMA TEA harbor?
First, from a surface-level view of its operational performance, BAMA TEA is experiencing a dual decline in profits, with subsequent growth momentum appearing insufficient. In 2024, the company was only facing a slowdown in profit growth, but by mid-2025, BAMA TEA's performance showed a dual decline. The growth of its heavily relied-upon franchise model is clearly losing steam. From 2022 to 2024, the net increase in directly franchised stores was 206, 265, and merely 5, respectively, indicating a significant slowdown in net additions for 2024.
After breaking its IPO price, the stock hits a new low! The dual profit decline impacts growth expectations, and BAMA TEA's premium narrative faces direct challenges. In 1998, BAMA TEA opened its first chain store in Shenzhen, initiating its chain operation model. Since then, the company embarked on an expansion path,推行 the franchise model, operating across regions, and gradually expanding into e-commerce channels to achieve an omni-channel layout. Currently, BAMA TEA offers a comprehensive product portfolio of premium Chinese tea, covering all major tea categories in China, including Oolong tea, Dark tea, Black tea, Green tea, White tea, and Yellow tea, as well as non-tea products such as tea sets, tea snacks, and tea beverages.
BAMA TEA's path to capital markets has been relatively bumpy. The company first sought a listing on the Shenzhen Stock Exchange as early as 2013 but subsequently voluntarily suspended the process. In 2015, it shifted to the New Third Board and was listed in December of that year, only to terminate its listing in 2018 due to "long-term strategic planning adjustments" and other reasons, once again planning for a Shenzhen listing. However, after undergoing multiple rounds of inquiry, its IPO application for the ChiNext board was unfortunately rejected in 2022. It wasn't until 2024, when the company adjusted its strategy and turned to the Hong Kong Stock Exchange, that it finally succeeded in listing in Hong Kong in October 2025.
On its first day of trading, BAMA TEA's stock price surged by 86.7% year-on-year, and on the second day, it once climbed to a high of HKD 93.35 per share. Yet, the good times did not last; merely over a month after listing, its stock price turned downward and fell below the issue price. By the close on January 9, 2026, the company's share price had dropped to HKD 29.12, even setting a new intraday low of HKD 29.04. As investors voted with their feet, the sharp rise followed by a sustained volatile decline and break below the issue price may indicate a gap between BAMA TEA's business model and the capital market's stringent demands for "standardization" and "sustainable growth."
First, looking at performance, BAMA TEA's growth is weak. From 2022 to 2024, its revenue was RMB 1.818 billion, RMB 2.122 billion, and RMB 2.143 billion, respectively, with revenue growth rates of 16.8% and 1.0% for 2023 and 2024. Net profit was RMB 166 million, RMB 206 million, and RMB 224 million for the same periods, with net profit growth rates of 24.0% and 8.9% for 2023 and 2024. While 2024 only saw a slowdown in profit growth, by the first half of 2025, BAMA TEA began experiencing a dual decline: revenue was RMB 1.06 billion, a year-on-year decrease of 4.2%, and net profit was RMB 120 million, a year-on-year drop of 17.8%.
The fluctuating and declining market capitalization further confirms that capital market enthusiasm for traditional tea companies is not high. China Tea, backed by the COFCO Group, ultimately faced delisting after years on the A-share market; Tenfu Tea, listed in 2011, now trades at less than one-tenth of its issue price; and Lancang Ancient Tea broke its issue price immediately upon listing in December 2023 and was deeply in the red by 2024.
Currently, it appears that behind BAMA TEA's falling stock price, its core narrative as the "leader in premium Chinese tea" is being challenged. According to its prospectus, the average selling price of its premium brand "Xin Ji Hao" tea has been continuously declining, dropping from RMB 901 per kilogram in 2022 to RMB 715 per kilogram in the first half of this year.
Furthermore, according to prospectus data, sales of its ultra-premium tea with a suggested retail price exceeding RMB 70,000 per kilogram decreased significantly. By the first half of 2025, such products were no longer included among its main products. This led to a substantial narrowing of the suggested retail price range for its main products, adjusting from RMB 800-168,064 per kg at the end of 2024 to RMB 931-70,196 per kg.
Franchise expansion is already showing signs of fatigue, with franchise store growth declining in 2024. The buyout franchise model harbors risks of chaotic product pricing. BAMA TEA has built an extensive offline retail network, but the vast majority are franchise stores. According to the company's prospectus, as of the end of June 2025, BAMA TEA had a total of 3,585 stores, of which 3,343 were franchisees, accounting for 93% of its offline store count.
Simultaneously, nearly half of the company's revenue comes from franchisees "purchasing inventory." For the years ended December 31, 2022, 2023, and 2024, and the six months ended June 30, 2025, revenue generated from sales to franchisees accounted for 50.2%, 50.6%, 50.9%, and 49.1% of total revenue for the respective periods.
Recently, however, the growth in the number of franchisees has shown fatigue, indicating that the core channel momentum BAMA TEA relies on for growth may be weakening. From 2022 to 2024, the net increase in directly franchised stores was 206, 265, and only 5, respectively, showing a sharp decline in store additions for 2024, which remained at a low level in the first half of 2025. Similarly, the net increase in stores from regional composite franchisees dropped from 210 to 196. As franchise growth cooled, revenue contribution from franchise stores also declined in the first half of 2025, falling by 1.9 percentage points year-on-year to RMB 522 million.
Notably, behind the faltering growth of BAMA TEA's franchise model lies a hidden concern of "pricing chaos." According to the prospectus, BAMA TEA adopts a "buyout franchise" model where products are sold on a non-returnable, non-exchangeable basis after sale, undoubtedly shifting some inventory pressure onto franchisees. To meet the company's mandated "annual minimum purchase volume" and digest inventory pressure created by the "buyout" model, some franchisees may sell their purchased BAMA products at lower prices through unauthorized channels (such as low-price e-commerce platforms like Xianyu). This undoubtedly disrupts the company's official pricing system and sales channel management, thereby weakening brand value.
Amid the market value decline and performance challenges, how can BAMA TEA stabilize its premium narrative, develop richer consumption scenarios, reduce reliance on the franchise inventory-push model, and genuinely build core competitiveness based on product strength, brand culture, and consumer experience? Only by addressing these issues might BAMA TEA navigate market cycles and win long-term trust from the capital markets.
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