On May 29th, Ba Wang Cha Ji Holdings Limited (NASDAQ: CHA) (hereinafter referred to as "Ba Wang Cha Ji") announced its first quarter financial report for 2026. As of March 31, 2026, Bawang Tea Ji achieved a total GMV of 7.918 billion yuan, a month on month increase of 8.1%; Net income was RMB 3.546 billion, a year-on-year increase of 4.5%; After adjustment, the net profit was 507 million yuan, and the profitability and operational resilience were significantly enhanced. Bawang Tea Ji has 7531 stores worldwide.

After the release of the financial report, Zhang Junjie, founder, chairman and global CEO of Bawang Tea Ji, Yin Dengfeng, COO, CEO and China region CEO of Bawang Tea Ji, and Huang Hongfei, CFO of Bawang Tea Ji, attended the financial report conference call. At the meeting, the management of Bawang Tea Ji stated that the company's performance has steadily grown and is entering a mature, stable, and sustainable stage of high-quality growth.

In addition, the board of directors of BaWang Tea Ji has approved a share repurchase plan to repurchase up to $150 million worth of American Depositary Shares (ADS) within the next 12 months.

Zhang Junjie stated at the financial report meeting that the current stock price of Bawang Tea Ji is severely undervalued and fails to reflect the company's long-term development prospects reasonably. BaWang Tea Ji Company has a clear strategic direction, efficient team operation, and orderly overseas layout. We are confident in every step of the future. Next, all work will focus on product, service, environment, experience, and value proposition

Steady performance growth: Product innovation is an important driving force, with multiple new product indicators reaching historic highs

In the first quarter of 2026, the global GMV of Bawang Tea Ji reached 7.918 billion yuan, an increase of 8.1% compared to the previous quarter; Among them, the GMV in the China region reached 7.491 billion yuan, a month on month increase of 7.8%, and the growth rate of same store GMV in the China region improved by nearly 10 percentage points month on month. In the first quarter, the operating profit of Bawang Tea Ji reached 547 million yuan, with an operating profit margin of 15.4%, turning losses into profits compared to the previous quarter; After excluding equity incentive expenses, the company's adjusted operating profit reached 606 million yuan, corresponding to an increase in operating profit margin to 17.1%, a significant improvement from the previous quarter's 1.0%.

The management of BaWang Tea Ji stated during the conference call that there is a clear positive trend in store operations, which is attributed to factors such as the accelerated frequency of new product launches in the first quarter, the expansion of morning and evening scenes, and AI platform activities.

During the financial reporting period, Bawang Tea Ji launched a total of 12 new products, which not only expanded the category boundaries but also gained high recognition from consumers and the market, forming a matrix of original leaf fresh milk tea, tea latte, tea special adjustment and light factor products, significantly driving the company's performance growth.

For example, the Dahongpao Tea Special Series combines the rock bone floral aroma of Dahongpao with fruity aromas such as mango and strawberry. As soon as it was launched, its sales performance was very impressive, with indicators such as first week GMV, cup contribution ratio, first week repurchase rate, and direct recruitment of new customers all exceeding the historical average of new products. The new product "Yunjiao Camelo", which combines Yunnan ripe Pu with caramel flavor, has a distinct and memorable taste, demonstrating the potential to become a long-term best-selling item.

Bawang Tea Lady launches new Da Hong Pao tea special series in the first quarter

After the launch of the "Morning Series" activity, the proportion of cups in the morning session doubled. At the same time, with the support of activities such as buying in store gifts, the proportion of orders and new customers on the BaWang Tea Ji mini program channel has significantly increased during the event period, and the private domain and new customer acquisition capabilities have continued to strengthen.

Before and after the Spring Festival, during the large-scale beverage subsidy campaign launched on AI platforms, Bawang Tea Ji became the "face of traffic" for various platforms due to its insistence on high-value brand positioning. During the peak activity period from February 6th to 10th, the AI platform contributed about 3 million orders to Bawang Tea Lady.

Adjustments have shown results: Young brands are maturing and entering a stage of high-quality growth, with a repeat purchase rate of over 42% for active members

At the first quarter financial report conference, Bawang Tea Ji shared the company's strategic thinking during the adjustment period. Firstly, in 2026, Bawang Tea Lady will focus its overall strategic focus on the operation itself, focusing on doing every little thing that users truly care about; Secondly, the organizational adjustment of Bawang Tea Lady has shown results, and the company's operational efficiency has significantly improved; Thirdly, the product and marketing plan are clearly formed, and the execution focus is highly defined.

From a data perspective, after a series of adjustments and optimizations, the overall organizational efficiency of BaWang Tea Ji has improved from headquarters to stores, with clear team execution priorities and a focus on creating user value. The adjusted management expense ratio has decreased by 8.1 percentage points month on month to 11.6%, and the adjusted sales and marketing expense ratio has decreased by 3.6 percentage points month on month to 8.6%.

The management of Bawang Tea Ji stated that in the past few quarters, Bawang Tea Ji has proactively slowed down the pace of store expansion, focused on the quality of single store operations, customer experience, brand standards, and comprehensively promoted store upgrades.

In addition, the management also mentioned that BaWang Tea Ji will adjust its franchise model to a GMV based revenue sharing model, which will significantly reduce the cost of raw materials and equipment procurement for franchisees. The company and franchisees will truly achieve a community of interests and share risks, which will help improve the profitability and risk resistance of the stores. Through the new model, BaWang Tea Ji has formed close cooperation with franchisees, creating a long-term sustainable profit model while making each store a touchpoint for transmitting brand value and winning long-term trust from users.

The membership activity of Bawang Tea Lady confirms the strategic adjustment effect of Bawang Tea Lady from another perspective. As of the first quarter, the number of members of Bawang Tea Ji has exceeded 248 million, becoming an important asset of the brand. The management of BaWang Tea Ji revealed at the financial report meeting that the brand's active member repurchase rate remained at 42.3%, with over 76% of orders contributed by members who purchased twice or more.

Overseas sustained high-speed growth: GMV increased by 139% year-on-year, with 374 overseas stores

This quarter, Bawang Tea Ji's overseas business continued to maintain a high-speed growth trend. During the financial reporting period, the GMV of Bawang Tea Ji's overseas market reached 426 million yuan, a year-on-year increase of 139%, with a total of 374 stores. The overseas market has become an important growth engine for Bawang Tea Ji.

As of March 31, 2026, Ba Wang Cha Ji has entered countries and regions such as Malaysia, Singapore, Thailand, Indonesia, the Philippines, Vietnam, and the United States. The Thai stores have expanded from Bangkok to Chiang Mai, and the Indonesian market has expanded from Jakarta to Bali. In addition, on April 30th, Bawang Tea Lady officially entered the Korean market, and its global business map has covered 9 countries and 2 continents.

The senior management of Bawang Tea Ji revealed at the financial report meeting that in the first quarter, the number of Bawang Tea Ji stores in Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, and the United States were 36, 221, 32, 41, 13, 22, and 9 respectively, continuing to expand rapidly, and the store operation performance met the company's expectations.

Bawang Tea Lady Korea's First Store

In addition, Bawang Tea Lady promotes localized operations based on different market demands. In addition to marketing activities, it also launches regional limited products. For example, in Singapore, Bawang Tea Lady has launched regional limited edition products such as Camellia Oolong and Gu Xiang Roasted Tea; Among them, Gu Xiang roasted tea sold an average of 440 cups per day in the first week of its launch. In some CBD stores in Singapore, BaWang Tea Ji has launched a pilot breakfast product portfolio, driving a doubling of sales during breakfast time.

From the perspectives of product innovation, membership growth, high-value brand appeal, market responsiveness, and global organizational synergy, BaWang Tea Ji undoubtedly has the embryonic form of a global consumer enterprise. Bawang Tea Lady will continue to adhere to a long-term and high-quality development strategy, not blindly pursue short-term scale expansion, and move towards a more mature, sustainable, and high-quality growth enterprise stage.