Roshan Padamadan of Luminance Capital presented his investment thesis on Chagee (Nasdaq: CHA) at Asian Investing Summit 2026.
Thesis summary:
Chagee is a premium fresh-leaf tea platform based in China aiming to become the “Starbucks of tea” through global expansion. Founded in 2017 in Yunnan by Zhang Junjie — now China’s youngest billionaire, retaining ~35% ownership — Chagee operates 7,453 stores globally, with ~6,700 in Greater China, and brews via a proprietary “tea espresso” machine delivering ±2% consistency across geographies versus an estimated ±10% for barista-made products. Priced around 20 yuan (~$4-5) per drink, it targets the upwardly-mobile Chinese consumer and an under-branded global tea category with no dominant premium player.
The model is 82% franchised, with Chagee collecting royalties and supplying tea and ingredients at high margins, while its app (~177M registered users, ~45M active) drives ~90% of footfall. Store closure rates run at ~2%, well below the industry median, and franchise unit economics hold up even after monthly per-store revenues normalized from over RMB 500K to the RMB 350-400K range. Company-owned stores — 18% of revenue but +126% YoY in Q4 2025 — handle brand control in Singapore (~20 stores), the US (seven in LA), and Korea (new launch).
China is shifting from growth to cash generation, while international rollout — Korea, Malaysia (300-store franchise plan), Thailand JV, US, Middle East, and Europe — carries the valuation narrative. Same-store sales in China fell 20-24% in 2025 as Alibaba- and Meituan-led discount wars pulled coupon-seeking consumers toward mass-market peers HEYTEA and Mixue, but Chagee declined to participate, protecting brand equity. Chinese regulators have since pressured such discounting, which Roshan expects to improve sentiment during 2026.
FY2025 revenue was RMB 12.91B (~$1.85B), net income RMB 1.19B (~$170M), and non-GAAP net income RMB 1.91B (~$273M). The shares recently traded at ~$10 versus the April 2025 IPO at $28, implying a market cap of ~$1.7B, offset by a cash balance comprising a large share of that market cap, no debt, and ~$400M of annual FCF distributed as a dividend last December (~8-9% yield). Multiples are ~0.92x EV/Revenue, ~5.5x EV/EBITDA, and a single-digit P/E ex-cash. JPMorgan recently set a $16 target on stabilizing same-store sales in 2026, implying ~60% upside. Roshan views Chagee as a combination of value and growth with multi-bagger potential over 5-10 years, cushioned by cash and dividend yield.
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Asian Investing Summit 2026 was held from April 14-21, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
Slides
Let’s take a closer look.
