Compared to the double growth in revenue and profit of Mi Xue Bing Cheng, Gu Ming, and Cha Bai Dao, the tea drink "new rich" Ba Wang Cha Ji has submitted an annual report with a sharp decline in net profit.

On the evening of March 31st, Bawang Tea Lady (NASDAQ: CHA) released its financial report showing that its net income in 2025 increased by 4% year-on-year to 12.907 billion yuan, and its net profit attributable to the parent company was 1.171 billion yuan, a year-on-year decrease of 53.45%.

In the fourth quarter, Bawang Tea Lady went from profit to loss. In the fourth quarter of 2025, Bawang Tea Lady achieved a revenue of 2.974 billion yuan, a year-on-year decrease of 10.8% according to calculations; The recorded operating profit was -35.5 million yuan, compared to 640 million yuan in the same period last year.

The financial report pointed out that the decline in revenue in the fourth quarter of last year was mainly due to the different timing and pace of new product launches between last year and the previous year, as well as changes in the subsidy competition pattern of Chinese online food delivery platforms. The decline in operating profit is mainly due to the impact of organizational structure optimization and business model transformation in the current quarter, as well as the influence of equity incentive expenses.

Founder Zhang Junjie of Bawang Tea Ji stated during the earnings conference that the company underestimated the degree of "internal competition" in the market in 2025 and also underestimated the impact of the instant retail platform "takeaway war" on offline tea consumption. The company's response strategy was not perfect enough and the response efficiency was also insufficient, resulting in many missed opportunities.

During the peak period of the price war on food delivery platforms in 2025 (July August), Zhang Junjie repeatedly publicly stated that Bawang Tea Ji is one of the few brands that firmly refuses to participate in the "food delivery war". He believes that competitive behavior dominated by short-term subsidies is unsustainable.

In the past, Ba Wang Tea Lady achieved high growth. In 2023, its revenue growth rate will exceed 843%, and its net profit growth rate will exceed 982%; In 2024, revenue and profit will still achieve growth of 167% and 214% respectively.

Zhang Junjie said that the stage of the company has changed. The company is no longer a company driven by its founder and charged by hundreds of people, but a large chain company with more than 3400 people; The organizational inertia formed during the past period of conquering cities and territories is no longer sufficient to support the requirements of refined management in the new stage. Therefore, starting from the second half of 2025, BaWang Tea Ji will promote organizational structure optimization, business model switching, and strategically slow down the pace of new product launches, which objectively affects revenue and causes the team to miss timely response to external changes.

Compared to other new tea beverage companies, Bawang Tea Lady's dependence on large single products is particularly evident. The core product "Boya Juexian" contributes over 40% of the sales revenue of Bawang Tea Ji. In 2025, this major product will face the dual challenges of low prices from competitors and a decline in consumer repurchase rates.

Bawang Tea Lady has increased its frequency of new listings in the fourth quarter. In November, the classic single item Boya Juexian launched an upgraded version of the "floral fragrance"; In December, a new product series "Guiyun" was launched. Entering 2026, Bawang Tea Lady will launch nearly 10 products including matcha and Dahongpao.

During the conference call, Zhang Junjie admitted that the company has taken some detours in new product launches and marketing execution, and has not fully kept up with market changes. The advantages of Bawang Tea Lady in the past were relatively concentrated menu, clear popular products, and high supply chain efficiency; But as freshly brewed tea drinks enter a new stage of high frequency, this advantage may also turn into a constraint.

The remedial example provided by the management is that the Guiyun series products launched in December awakened 51% of dormant members and drove an overall GMV month on month growth of 16.2%.

In 2026, the recent domestic same store sales data has shown a trend of month on month improvement, which makes us confident in the full year pace of stabilizing in the first half of the year and repairing in the second half, "Zhang Junjie repeatedly emphasized in the conference call. This year, we will not simply pursue high-speed growth, but make the recovery of same store sales the company's top KPI, nor will we exchange price reductions for short-term traffic. Instead, we will attract consumers through high-quality product innovation and excellent offline experiences. He expects that the company's revenue and profit will remain basically unchanged from 2025 in 2026.