The stock price has fallen nearly 80%, has the true value of Bama Tea Industry been underestimated?

Is the sharp drop in BaMa Tea Industry’s stock price a reflection of excessive market panic?

Produced by | Zhongfang Network

Reviewed by | Li Xiaoyan

As the “Number One Stock in High-End Tea,” BaMa Tea Industry (06980.HK) received widespread market attention with its first annual report since listing. In 2025, facing a complex environment of weak demand in the tea industry and adjustments in consumption structure, the company delivered a steady yet resilient performance: total revenue of 2.2B yuan, a slight increase of 2.5% year-over-year; adjusted net profit of 241 million yuan, up 2.8%; gross profit margin of 55.6%, up 0.6 percentage points year-over-year. Despite short-term slowing growth and stock price fluctuations, the company is solidifying its position as a leading high-end tea brand through prudent financials, full-channel barriers, brand momentum, and supply chain upgrades, laying a foundation for long-term high-quality development.

During industry adjustments, BaMa Tea Industry demonstrated strong financial resilience, providing a sufficient safety cushion against market volatility. Cash flow and debt structure remained healthy. As of the end of 2025, the company’s cash and cash equivalents reached 889 million yuan, with no bank loans, and a stable asset-liability ratio. In October 2025, the company successfully listed on the Hong Kong Stock Exchange, raising a net of approximately 390 million HKD, with total equity rising to 1.7B yuan. This ample capital reserve supports subsequent capacity expansion, channel optimization, and brand investment. Profitability also showed resilience; although net profit for the year slightly declined by 0.8%, adjusted net profit—excluding one-time listing-related expenses—still achieved positive growth.

Gross profit margin continued to improve, driven mainly by a significant increase in self-produced product revenue, which reached 1.29 billion yuan in 2025, a 21.6% increase, accounting for 58.9% of total revenue. By extending upstream in the industry chain, the company reduced procurement costs and further strengthened source control over tea quality, creating dual advantages in cost and quality. In the first half of 2025, revenue and net profit experienced a temporary decline mainly due to overall industry demand weakness and channel restructuring, but rapid recovery in the second half led to a slight annual increase, demonstrating the company’s strong operational resilience and market recovery ability.

Channels are BaMa Tea Industry’s core competitive advantage. In 2025, the company continued to advance both offline deepening and online breakthroughs, improving the breadth of its channel network and operational efficiency simultaneously. Offline stores maintained a nationwide layout. By the end of 2025, the total number of stores reached 3,773, a net increase of 269 during the year, covering all provinces and 269 prefecture-level cities nationwide. Franchise models remained dominant, with 3,538 franchise stores at year-end, accounting for 93.8% of total stores, a net increase of 283 stores. The company pushed channel sinking and network densification simultaneously, continuously strengthening the “Thousand Cities, Ten Thousand Stores” channel foundation. The number of directly operated stores decreased by 81 during the year, not due to operational contraction but as part of strategic adjustments focusing on high-efficiency stores and improving per-store output, laying the groundwork for long-term quality enhancement.

Online business also maintained growth. In 2025, the company’s online omnichannel GMV reached 876 million yuan, up 4.4% year-over-year. Among these, instant retail performed notably well, with GMV on platforms like Meituan Flash and Taobao Flash increasing sharply by 90% YoY. On major e-commerce platforms, BaMa Tea Industry continued to lead, achieving 11 consecutive championships in Tmall’s Oolong tea category and ranking first in tea sales nationwide on JD.com, further consolidating its position as a high-end tea leader online. Facing the industry-wide issue of declining per-store output in franchise stores, the company is proactively shifting from scale expansion to quality improvement by strengthening terminal sales support, standardizing market pricing, and leveraging digital tools to empower store operations. This transformation aims to shift the franchise system from previous inventory-driven scale growth to high-quality growth focused on actual sales, injecting new momentum into long-term channel health.

BaMa Tea Industry’s high-end positioning is not merely conceptual marketing but is supported by solid strength through brand accumulation, product matrix, and industry standards. In 2025, the company’s brand influence continued to lead the industry, winning multiple prestigious honors such as the No. 1 among China’s top 50 tea brands and the top Chinese tea enterprise brand on the World Tea Brand List. The company actively participates in industry standardization, leading or participating in 29 industry standards and 16 system certifications, promoting high-quality industry development through standardization and further establishing its market image as a benchmark for high-end tea quality.

Regarding product matrix, the flagship “BaMa” brand saw a slight revenue increase of 3.9%. Relying on classic star products like Sajin Pearl Tieguanyin and Niuyiyan Tea, it maintains a core market in high-end business and gift tea. The sub-brand “Wanshanhong,” targeting young consumers, saw a substantial revenue increase of 97.2%, becoming a new growth driver. The sub-brand “Xinjihao,” focusing on premium Pu’er, experienced a short-term revenue adjustment, which is a strategic move to optimize product structure and focus on core categories, and does not alter the company’s long-term high-end layout. As a heritage inheritor of Tieguanyin, BaMa Tea Industry combines traditional craftsmanship with modern technology, using blockchain traceability to visualize the entire process from tea garden to cup, making high-end tea’s quality perceptible and traceable. With tea culture as its core, the company elevates tea from a daily beverage to a cultural and social carrier, continuously strengthening its high-end brand image.

Undeniably, BaMa Tea Industry still faces challenges such as slowing growth, high inventory levels, and stock price volatility. However, these issues are common during industry adjustments and are part of the phased pain points in the transition from scale expansion to high-quality development for leading enterprises. As of the end of 2025, the company’s inventory book value was 579 million yuan, up 31.9%, with long-aged inventory over 36 months totaling 120 million yuan, up 49.9%. Given the industry characteristics, categories like aged Pu’er and white tea have certain collectible and appreciation attributes. The company is also continuously optimizing inventory structure through product adjustments, enhancing channel sales capabilities, and strengthening inventory management to reduce capital occupation and potential devaluation risks.

In terms of growth drivers, the company is gradually shifting from relying on franchise store expansion to a multi-driven model emphasizing self-produced efficiency, online growth, targeting young markets, and increasing per-store output. The rapid growth of Wanshanhong, high-speed instant retail, and the continuous increase in self-produced proportion will support new performance growth and gradually offset short-term growth gaps. In the capital market, the stock price has fallen nearly 80% from its peak at listing, mainly due to initial market panic caused by fluctuations in the small free float and the H-share full circulation plan. Currently, these risks have been largely released. As subsequent financial reports show improvements in store efficiency, steady profit growth, and inventory structure optimization, the market will reappraise BaMa Tea Industry’s long-term value as a high-end tea leader.

BaMa Tea Industry’s “high-end tea” story is not unsustainable but has entered a new phase of comprehensive quality upgrade from rapid scale expansion. In China’s trillion-yuan but highly fragmented tea industry, the company is becoming a core force driving industry consolidation through its solid financial foundation, nationwide full-channel barriers, leading brand standards, and ongoing supply chain upgrades. Short-term industry fluctuations and operational adjustments will not change the long-term trend. As consumer markets recover, channel structures optimize, and new growth drivers emerge, BaMa Tea Industry is expected to navigate industry cycles steadily, continuously strengthen its position as the “Number One High-End Tea Stock,” deliver higher-quality tea products to consumers, and create sustainable long-term value for investors.