[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
FatumOpes @D27357 on x XXX followers
Created: 2025-07-27 09:42:16 UTC
Honestly, I don't have very high expectations. Expenses are going to be through the roof and revenue growth probably somewhat flat. The Chinese premium tea leisure market is mostly saturated, so there is not that much room to grow, although they are pushing for some efficiency improvements (like outsourcing store cleaning, so the staff can focus on service) and offering new products, eg. Low caffeine green tea. But the two growth curves that are going to bring future revenue growth require a lot of investment rn, but are still insignificant revenue wise compared to Chinese leisure market.
- overseas extension; this brought only XXX% of revenue in Q1. Chagee first has to establish a presence and supply chain (with their 1+1+9+n model), but once that's established they can scale very quickly. Other than Singapore and Malaysia we aren't there yet for overseas expansion. And they are spending a lot on Marketing and initial expansion, so profit margin is not gonna be great.
- challenging coffee is work/productivity drink of choice. So far Changed has mostly been a leisure milk tea brand. They have a pilot with XX stores in Shanghai rn, "Chagee NOW" that directly targets the work/productivity coffee - crowd, with pure tea (coffee americano), teaspresso machines and tea latte; located in business districts of Shanghai. This growth curve is still in its pilot phase and therefore doesn't yet have a significant impact on the overall revenue.
If these two growth curves are successful and starting to appear in the revenue, I believe Chagee will reprice to a significant premium.
I think that the market now sees flat quarterly revenue for the last X quarters (and possibly for the next one or two) and declining net return on sales and see a Chinese milk tea brand that has topped. I of course believe that it has much more potential, with the X growth curves I just outlined. But I don't know when the market will price in this potential. I also don't see much downside here at XX pe. Earnings are definitely going to be interesting, but my thesis doesn't rely on it being a blow out.
XXX engagements
Related Topics cleaning quarterly earnings