Analysis of Stock Performance and Premium Positioning of Bama Tea After Its Hong Kong IPO

Bama Tea listed on the Hong Kong Stock Exchange on October 28, 2025. Its performance on the first day was stunning: it opened with a sharp rise of 86.7%, and the stock price hit a peak of HK$115 the next day [1]. However, this short-lived glory soon became the beginning of a nightmare. As of the close on December 25, 2025, just two months after listing, the company’s stock price had dropped 35% from the issue price, and its total market value (Hong Kong market value plus non-tradable domestic share market value) shrank by about HK$1.5 billion; from the peak, the decline was as high as 72%, with a market value evaporation of HK$7 billion [1][2].

This violent roller-coaster trend profoundly reveals the attitude of the Hong Kong stock market towards speculative targets lacking fundamental support. The root cause of the sharp rise in the early days of listing lies in the extreme scarcity of tradable shares—after the IPO, the company had 32.013 million non-listed domestic shares and 52.987 million H-shares, but about 44 million H-shares were not tradable due to lock-up commitments, and the actual tradable shares were less than 8.9 million [2]. This situation of “more monks than porridge” causes any capital inflow or outflow to create huge waves, and the stock price reflects only short-term chip games, not the real value of the enterprise.

What is more alarming to investors is that just two days after listing, the company submitted an application for “full circulation of H-shares”, planning to convert domestic shares accounting for about 37.57% of the total share capital into tradable H-shares. Although it will take time to complete the conversion, the market was still jittery, and the stock price plummeted more than 50% from HK$115 to break the issue price within 9 trading days [2].

Bama Tea’s core narrative is the “leader of high-end Chinese tea”, but financial data gives a completely different answer.

: From 2022 to 2024, the company’s revenue increased from 1.818 billion yuan to 2.143 billion yuan, and the annual growth rate has slowed down significantly. In 2024, the full-year revenue increased by only 1%, almost stagnant [2]. In the first half of 2025, the situation further deteriorated, with revenue slightly dropping from about 1.110 billion yuan in the same period last year to 1.063 billion yuan, a year-on-year decrease of about 4.2%.

: Net profit contracted more sharply. In the first half of 2025, net profit was 120 million yuan, a sharp drop of 17.8% compared with the same period last year [2]. This means that the company not only faces a bottleneck in revenue growth but also bears huge pressure on the profit side.

Financial Indicator	2024	H1 2025	YoY Change
Revenue	2.143 billion yuan	1.063 billion yuan	-4.2%
Net Profit	~240 million yuan	120 million yuan	-17.8%

This state of stagnant growth is in sharp contrast to its positioning as the “leader of high-end Chinese tea”. Premium positioning should bring stronger pricing power and higher gross profit margins, but market feedback shows that consumers have limited recognition of Bama Tea’s high-end products, and the company is unable to achieve sustained growth through brand premium.

On the first day of listing, Bama Tea’s 37x trailing price-earnings ratio was already high, higher than new consumer representatives like Mixue Ice Cream & Tea and Laopu Gold, and even close to Pop Mart’s valuation level [2]. This valuation requires the company to have revenue growth rates far exceeding the industry and stronger profitability to support it. However, the reality is:

1. Obvious Industry Ceiling
   : China’s tea market is highly fragmented, with low brand awareness, and consumers are highly price-sensitive to high-end tea
2. Fierce Competitive Landscape
   : Traditional tea enterprises and new-style tea drink brands are all competing for market share, and Bama Tea has not built a sufficiently solid brand moat
3. Limited Consumption Scenarios
   : The core consumption scenarios for high-end tea (gifts, business receptions) have continued to shrink in recent years

Bama Tea’s 35% drop in stock price is not just a market sentiment fluctuation, but a real vote by the market on its fundamentals and development prospects. Its positioning as the “leader of high-end Chinese tea” faces three challenges:

• Stagnant Growth
  : Revenue is almost stagnant, net profit has fallen sharply, and premium positioning has not translated into performance growth
• Insufficient Brand Barriers
  : Market awareness and loyalty to “high-end” are limited, making it difficult to support high premiums
• Valuation Regression
  : The 37x trailing price-earnings ratio lacks fundamental support, and the stock price drop is essentially the bursting of the valuation bubble

In the short term, the extremely small tradable share volume and expectations of full circulation will still lead to violent fluctuations in stock prices; in the long term, the company needs to use tangible performance growth to prove the value of its premium positioning to regain market trust.

[1] Two months after listing, Bama Tea fell hard (https://caifuhao.eastmoney.com/news/20260104121255082388680)
[2] Two months after listing, Bama Tea fell hard (https://m.sohu.com/a/969845257_116132)