Ba Wang Tea Princess's net income in 2025 is 12.9 billion yuan, with overseas GMV increasing over 75% year-over-year for three consecutive quarters, and a shift in the partnership model with franchisees.

Ask AI · How can Bawang Tea Princess reverse the decline in single-store performance in China through a new model?

Red Star Capital Bureau, April 1 — Bawang Tea Princess (NASDAQ: CHA) released its first annual report since going public on the evening of March 31. In 2025, the company achieved total GMV (gross merchandise value) of 31.58 billion yuan, up 7.2% year-on-year; net revenue of 12.91 billion yuan, up about 4% year-on-year; operating profit of 1.347 billion yuan, down 53.33% year-on-year; and adjusted net profit of 1.91 billion yuan, down more than 20% year-on-year.

Looking back at 2025, Bawang Tea Princess’s overseas business performed relatively well. In last year’s fourth quarter, its overseas GMV reached 370 million yuan, up 84.6% year-on-year and up 23.9% quarter-on-quarter. Overseas GMV has posted year-on-year growth of over 75% for three consecutive quarters.

Image from Visual China

However, compared with the overseas market, Bawang Tea Princess faces a more complex operating environment in China, and it carried out a comprehensive reorganization within the company in the second half of last year, which in turn weighed on performance. In last year’s fourth quarter, Bawang Tea Princess’s operating profit turned from profit to loss, shifting from a profit of 640 million yuan in the same period of 2024 to a loss of 35.5 million yuan.

Data shows that Bawang Tea Princess’s average monthly GMV per store in the domestic market has declined for eight consecutive quarters. After store counts doubled in 2023 and 2024, Bawang Tea Princess slowed its pace of opening stores last year, with the number of stores rising 15.73% year-on-year in 2025. At the same time, Bawang Tea Princess adjusted its cooperation model with franchisees; starting in 2026, the company will fully shift from a supply-and-sales model (selling raw-material goods) to a deep brand commission (GMV-sharing) cooperation model.

Overseas stores reach 345

Plans to open about 200 more overseas stores this year

On the evening of the 31st, Bawang Tea Princess released its Q4 2025 and full-year performance data. For full-year 2025, the company’s revenue increased 4% year-on-year to 12.907 billion yuan; operating profit was 1.347 billion yuan, down 53.33% year-on-year; and full-year net profit attributable to shareholders was 1.135 billion yuan, down 52.4% year-on-year.

The financial report shows that in 2025, Bawang Tea Princess’s overseas business segment saw a noticeably higher growth rate. In last year’s fourth quarter, its overseas GMV reached 370 million yuan, up 84.6% year-on-year and up 23.9% quarter-on-quarter. Overseas GMV has increased year-on-year by over 75% for three consecutive quarters. As of December 31, 2025, outside the Chinese market, Bawang Tea Princess had a total of 345 overseas stores, covering 7 countries in Southeast Asia and North America.

Bawang Tea Princess said it will continue to invest in overseas markets in 2026. In January this year, Bawang Tea Princess, together with the Singapore Tourism Board and the Asian Civilisations Museum, launched a tea culture exhibition titled “Tea Garden Dream.” This March, the company announced it will enter the Korean market; three stores in Gangnam, Yongsan, and Sinchon are scheduled to open in the second quarter of this year.

During the Q4 earnings call after the financial results were released, Bawang Tea Princess founder, chairman, and Global CEO Zhang Junjie said that 2026 will be Bawang Tea Princess’s “Overseas Foundation-Building Year,” with plans to add about 200 new overseas stores. More importantly, for each national market the company has entered, it will run and solidify the profitable operating model, and build a replicable same-store growth paradigm.

The domestic market faces a more complex operating environment

The founder revisits the biggest challenge of 2025

Compared with overseas performance, Bawang Tea Princess faced a more complex operating environment domestically last year. During the call, Zhang Junjie directly reviewed the situation: the comprehensive internal organizational adjustments in the second half of 2025 were met with slow responsiveness, and the postponement of new launches led to a clear decline in performance. “This is indeed the biggest challenge the company faced in 2025.”

Judging from the performance in last year’s fourth quarter, Bawang Tea Princess achieved revenue of 2.974 billion yuan, down 10.8% year-on-year; operating profit was a loss of 35.5 million yuan, compared with a profit of 640 million yuan in the same period of the prior year; and net profit attributable to shareholders was 28.538 million yuan, calculated as a year-on-year decline of 95.3%.

On April 1, Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, told Red Star Capital Bureau that Bawang Tea Princess’s Q4 performance decline was caused by both external and internal pressures. Externally, the new tea drink price war was intense, and because the company did not participate in low-price subsidies, foot traffic was lost; internally, costs arose from adjusting the organizational structure and restructuring the franchise model, and combined with a slowdown in new product iteration, multiple factors converged to turn profit into loss.

Lin Yue, chief consultant at Lingyan Management Consulting and an analyst for the food and beverage industry, believed that Bawang Tea Princess’s performance decline was mainly because it did not participate in the subsidy battle on delivery platforms, so sales lagged behind competitors. In addition, its deep organizational transformation in 2025 also slowed down its pace in new product releases, resulting in overall poor performance.

Red Star Capital Bureau noted that last year Bawang Tea Princess’s new product release cadence in new tea drink brands was relatively slow. According to the “Tea Beverage Category Development Report 2026” released by the Hongcan Industry Research Institute, in 2025, among 75 tea beverage sample brands it monitored, a total of 2,691 new products were launched. Among them, Nayuki (02150.HK) had an average of 8 new products launched per month; brands such as Chabaidao (02555.HK) and Hu Shang Ayi (02589.HK) had an average of 5 to 6 new products launched per month. Against this backdrop, Bawang Tea Princess’s average monthly number of new products was 3 to 4, with an average of 1 to 1.5 product launch times per month.

Bidding farewell, step by step, to the phase of rapid store expansion

“Stabilize in the first half, repair in the second half” planned for this year

It is worth noting that Bawang Tea Princess’s per-store ability to generate profits has been declining continuously. The company is gradually moving away from the phase of rapid store expansion and entering a period of transformation.

The financial report shows that Bawang Tea Princess’s average monthly GMV per store in the domestic market has declined for eight consecutive quarters. From the fourth quarter of 2023 to the fourth quarter of 2025, the average monthly GMV per store was, respectively, 574,000 yuan, 549,000 yuan, 538,000 yuan, 528,000 yuan, 456,000 yuan, 432,000 yuan, 404,000 yuan, 376,000 yuan, and 337,000 yuan.

From the end of 2022 to the end of 2024, Bawang Tea Princess’s global store count was 1,087, 3,511, and 6,440, respectively, showing almost double-digit growth nearly every year. In 2025, Bawang Tea Princess clearly slowed down its store-opening speed; by the end of last year, the total number of stores was 7,453.

At the Q4 earnings call, Zhang Junjie said that 2023-2024 was the company’s period of rapid development, with more than 7,000 stores nationwide. The “Boya Juexian” hundred-billion-yuan-level single flagship product helped Bawang Tea Princess successfully define the original leaf fresh milk tea category, and it accumulated nearly 240 million members. “All of these form our solid competitive barriers.” But in 2025, the tea beverage market entered a new stage: “We did not focus on (extreme consumer experience) with the same level of effort as before.”

According to management, after the internal adjustments in 2025, the work has basically been completed, and the pace and order of operations have returned to stable footing. Looking ahead to 2026, Bawang Tea Princess will continue to uphold “high-value branding and high-quality products.”

Specifically, this includes: introducing new store formats; targeting mainly young customer segments to innovate across multiple categories, such as tea special blends and tea lattes; strengthening penetration into morning and evening scenarios, as well as into diverse contexts like the workplace, major life events, birthdays, campuses, and weddings; improving user experience through the environment and services; and fully pushing forward systematic capability-building internally.

In addition, Bawang Tea Princess also adjusted its cooperation model with franchisees. As introduced by Bawang Tea Princess Global COO and Global Executive President and China CEO Yin Dengfeng, starting in 2026 the company will fully shift from a supply-and-sales model (raw-material sales) to a deep brand commission (GMV-sharing) cooperation model. “That means only if franchisees make money, can the company make money.” “This marks that we and our franchisees have truly become a community of shared interests, and we will work together in a closer collaboration to drive the continued growth of future GMV.”

“Entering 2026, recent domestic same-store sales data has shown an improving trend on a month-over-month basis. This gives us full confidence in the full-year rhythm of ‘stabilize in the first half, repair in the second half.’” Zhang Junjie said.

Red Star News reporters Yu Yao, Zhou Yi

Editors Xiao Shiqing; Review Ren Zhijiang