To The Moon

China’s food delivery war is pouring fuel on the fire for Hong Kong’s tea beverage stocks, with platforms like Meituan, Taobao, and JD.com dishing out hundreds of millions in subsidies to offer milk tea and coffee for as low as 1 SGD. This frenzy has sent order volumes through the roof, with tea brands like Nayuki ( $NiSun International Enterprise Development Group Co., Ltd.(NISN)$ ), ChaBaiDao ( $CHABAIDAO(02555)$ ), Mixue ( $MIXUE BINGCHENG CO LTD.(MXUBY)$ ), and CHAGEE ( $Chagee Holdings Limited(CHA)$ ) reaping the rewards. Mixue’s stock has tripled YTD, while Nayuki and ChaBaiDao each surged 11%, and CHAGEE rides the wave. Meanwhile, JD.com and Meituan are dipping under subsidy pressures, making tea stocks the stars of this battle. Which tea brand should you bet on for the biggest gains? Are you sipping on this opportunity, or sticking to the sidelines? This report dives into the delivery war’s impact, the top tea stocks to watch, and strategic investment approaches to capitalize on this sweet market surge.

China’s Delivery War: A Tea Stock Bonanza

The food delivery war in China has turned milk tea into a battleground, with Meituan, Taobao, and JD.com slashing prices to capture market share. Subsidies have driven beverage prices to ~1 SGD, sparking a surge in orders—some users are placing over 10 orders daily, overwhelming delivery systems. Meituan reported record order volumes that temporarily crashed its platform, highlighting the frenzy. This has been a boon for tea beverage stocks, with Daiwa analysts noting that brands like Nayuki, ChaBaiDao, Mixue, and CHAGEE are the biggest winners. The $150 billion bubble tea market is thriving, but sustainability hinges on continued subsidies and consumer demand.

Key Catalysts

• Subsidized Prices: Drinks at ~1 SGD or less have driven order volumes to historic highs, boosting tea brand revenues.

• Franchise Models: Brands like Mixue leverage vast franchise networks for scale, unlike direct operators like Nayuki.

• Consumer Trends: Health-conscious zero-calorie drinks and premium offerings are gaining traction, supporting growth.

• Market Volatility: The Hang Seng TECH Index rose 0.25%, but JD.com and Meituan dipped 2-3% due to subsidy costs, contrasting with tea stock gains.

Social media sentiment on X dubs this “the sweetest business war in history,” with users hyping tea stocks but warning of subsidy-driven volatility.

Top Tea Stocks to Watch

Here’s a curated list of Hong Kong tea beverage stocks with breakout potential, driven by the delivery war and strong fundamentals:

• Mixue (MXCY): Tripled YTD to HK$6.80, with a 47% surge on its March 2025 Hong Kong IPO debut. Its 36,000+ franchise stores and raw-material supply model drive scale, with Q1 2025 net profit up 9% to 3.49 billion yuan. Targets HK$8.00, support at HK$6.00.

• Nayuki (NIS): Up 11% recently to HK$2.70, fueled by premium milk tea offerings and delivery war demand. Its 1,500+ stores focus on quality, but higher costs limit margins. Targets HK$3.00, support at HK$2.50.

• ChaBaiDao (CBD): Up 11% recently to HK$10.50, with 8,000+ stores and a focus on affordable drinks. Targets HK$12.00, support at HK$10.00.

• CHAGEE (GMING): Up 5% recently to HK$4.30, gaining from delivery war but lagging in scale. Targets HK$5.00, support at HK$4.00.

JD.com and Meituan: Dipping While Tea Stocks Rise

While tea stocks soar, delivery platforms are feeling the pinch:

• JD.com (JD): Down 2% YTD to HK$110, with subsidy costs and competition pressuring margins. Its logistics strength supports tea brands, but profitability lags.

• Meituan (3690): Down 3% YTD to HK$120, hit by record order volumes crashing its system and subsidy expenses. Analysts see limited upside until costs stabilize.

Tea stocks are outpacing JD.com and Meituan, as subsidies directly boost beverage sales while weighing on platform profits.

My Bullish Pick: Mixue (MXCY)

I’m most confident in Mixue for its unmatched scale, franchise-driven growth, and 200% YTD surge. Its 36,000+ stores and raw-material supply model give it a cost advantage, while the delivery war’s subsidies fuel order volumes. Nayuki and ChaBaiDao are strong contenders, but their smaller networks and higher valuations (Nayuki at 30x P/E, ChaBaiDao at 25x) limit upside compared to Mixue’s 20x P/E. CHAGEE’s smaller scale makes it a riskier bet. Mixue’s momentum and market leadership make it the top pick, but subsidy cuts or consumer shifts could cap gains.

Risks to Consider

• Subsidy Sustainability: If Meituan, Taobao, or JD.com scale back subsidies, tea stock gains could stall, with Mixue potentially dipping to HK$6.00.

• Competition: New entrants and established brands like Heytea could erode market share, especially for smaller players like CHAGEE.

• Economic Headwinds: U.S.-China trade tensions and a potential Hang Seng Index pullback (down 0.5% recently) could pressure tea stocks.

• Consumer Trends: A shift away from sugary drinks or economic slowdown could dampen demand, impacting revenue growth.

Trading and Investment Strategies

Short-Term Plays

• Buy Mixue on Dip: Enter at HK$6.50-HK$6.80, target HK$8.00, stop at HK$6.00. A 17-23% gain if delivery war momentum holds.

• Buy Nayuki: Grab at HK$2.50-HK$2.60, target HK$3.00, stop at HK$2.40. A 15-20% upside on premium demand.

• Options Straddle: Buy calls/puts on MXCY at HK$6.80 to profit from volatility around subsidy or consumer trends.

Long-Term Investments

• Hold Mixue: Buy at HK$6.50-HK$6.80, target HK$9.00 over 12 months, for 32-38% upside with franchise growth.

• Hold ChaBaiDao: Buy at HK$10.00-HK$10.50, target HK$12.00, for 14-20% upside with brand expansion.

• Diversify with Consumer ETF (2800.HK): Buy at HK$8.00, target HK$9.00, for broad consumer exposure.

Hedge Strategies

• VIXY ETF: Buy at $15, target $18, stop at $13, to hedge against global volatility.

• Hang Seng ETF (2800.HK): Use puts at HK$8.00 to protect against a 5-10% index pullback.

• Gold ETF (GLD): Buy at $200, target $220, stop at $190, as a safe-haven hedge.

My Trading Plan

I’m bullish on Mixue for its market leadership and delivery war-driven growth but cautious about subsidy risks and volatility. I’ll buy Mixue at HK$6.50, targeting HK$8.00, with a HK$6.00 stop, betting on continued order volume surges. For diversification, I’ll add Nayuki at HK$2.50, targeting HK$3.00, with a HK$2.40 stop. I’m hedging with VIXY at $15, targeting $18, and keeping 20% cash to seize dips if trade tensions (e.g., U.S.-China tariffs) or subsidy cuts shake markets. I’ll monitor Meituan’s subsidy strategy, consumer demand trends, and Hang Seng Index movements for cues.

Visualizing Tea Stock Performance

The Bigger Picture

China’s food delivery war, with Meituan, Taobao, and JD.com slashing prices to ~1 SGD, has ignited a rally in Hong Kong tea beverage stocks. Mixue’s 200% YTD surge and franchise scale make it the top pick, outpacing Nayuki, ChaBaiDao, and CHAGEE, which benefit but lack its momentum. JD.com and Meituan, down 2-3% YTD, are weighed down by subsidy costs, making tea stocks the better bet. However, risks like subsidy cuts, competition, and trade tensions (U.S.-China tariffs) could trigger volatility, with a potential Hang Seng Index pullback. Investors should buy Mixue on dips for high-growth upside, diversify with Nayuki or ChaBaiDao, and hedge with VIXY or GLD to manage risks. The tea stock rally is brewing—pick your winner and trade smart.

Which Hong Kong tea stock are you most bullish on—Mixue, Nayuki, ChaBaiDao, or CHAGEE? Share your strategy below!

📢 Like, repost, and follow for daily updates on market trends and stock insights.

📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

📌@Daily_Discussion @Tiger_comments @TigerStars @TigerEvents @TigerWire