--- title: "BAMA TEA's path to listing is fraught with difficulties: high-end tea capitalisation faces valuation challenges" type: "News" locale: "en" url: "https://longbridge.com/en/news/274392029.md" description: "BAMA TEA's stock price experienced significant fluctuations after its listing, dropping to HKD 30.14 per share on January 27, 2026, a decline of over 70% from its peak, with a market value evaporating by nearly HKD 7 billion. The stock price surged 73% on its first trading day, but quickly fell due to the scarcity of circulating shares and speculative funds. The company was listed on the Hong Kong Stock Exchange on October 28, 2025, becoming the \"first high-end Chinese tea stock,\" but the lack of sustained market support led to substantial price volatility" datetime: "2026-01-31T14:05:49.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/274392029.md) - [en](https://longbridge.com/en/news/274392029.md) - [zh-HK](https://longbridge.com/zh-HK/news/274392029.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/274392029.md) | [繁體中文](https://longbridge.com/zh-HK/news/274392029.md) # BAMA TEA's path to listing is fraught with difficulties: high-end tea capitalisation faces valuation challenges After the brief speculative frenzy subsided, the stock price of BAMA TEA began to plummet. On January 27, 2026, the stock price of BAMA TEA fell to HKD 30.14 per share, a decline of over 70% from its peak, with a market value evaporating by nearly HKD 7 billion. Is this "roller coaster" market value fluctuation merely a stock price volatility of a single company? Is there a deeper examination by the capital market of the high-end Chinese tea business model behind this? What development pain points exist in this industry? Longbridge conducts an in-depth observation. **Stock price shock occurring less than two months after listing** The short-term surge in BAMA TEA's stock price is essentially the result of the scarcity of circulating shares in the Hong Kong stock market combined with speculative funds. According to the company's prospectus, after the IPO, only 52.987 million H shares are available for trading in the secondary market, of which about 44 million shares are locked up due to the lock-up commitments of the controlling shareholder and early shareholders until October 2026, leaving less than 8.9 million shares actually available for free trading. In the T+0 trading system of the Hong Kong stock market, this small circulating pool is like a "mini pond," where a small amount of funds can significantly impact stock price fluctuations. On the first day of listing, the trading volume of 4.22 million shares accounted for 47% of the available shares, and the rapid entry and exit of short-term speculative funds directly pushed up the stock price. On October 28, 2025, BAMA TEA (06980.HK) officially listed on the Hong Kong Stock Exchange, embarking on its capital market journey as the "first high-end Chinese tea stock." This listing, which took over a decade to prepare, began with a highlight moment—the company set its issue price at HKD 50, opening with a surge of 73% to HKD 86.5 on the first day, with an intraday peak increase of 86.7%, and the market value briefly approaching HKD 8 billion, while the public offering recorded an oversubscription of 2,680.04 times, showcasing market enthusiasm. The next day, the stock price continued to rise to HKD 115 per share, briefly surpassing a total market value of HKD 10 billion, injecting a strong dose of confidence into the dormant tea company listing wave. However, the brief upward trend ultimately could not withstand the scrutiny of the capital market, as BAMA TEA's stock market vessel lacked sufficient "momentum" to support it. Just two days after listing, the company's application for full circulation of H shares became a direct trigger for the stock price collapse. On October 30, 2025, BAMA TEA announced that its board of directors had reviewed and approved the proposed implementation of full circulation (referred to as "H share full circulation") and submitted a filing application to the China Securities Regulatory Commission regarding the conversion of approximately 31.9331 million domestic shares (referred to as "domestic shares") held by 11 shareholders into H shares (accounting for approximately 37.57% of the total shares issued by the company as of the date of this announcement). After obtaining all relevant filings and/or approvals (including but not limited to the China Securities Regulatory Commission and the Stock Exchange) and complying with all applicable laws, regulations, and rules, these domestic shares will be converted into H shares and qualify for listing and trading on the main board of the Stock Exchange. According to the company's articles of association, no further approval from the company's shareholders is required at the shareholders' meeting to approve the conversion and listing In simple terms, the board of directors of BAMA TEA has agreed to convert the company's "domestic shares" into "H shares" that can be traded on the Hong Kong stock market. According to the company's articles of association, this matter does not require convening a general meeting of all shareholders for a vote; the board's approval is sufficient. However, it still needs to obtain approval and filing from relevant departments such as the China Securities Regulatory Commission and the Hong Kong Stock Exchange before these shares can officially be converted into H shares. Although the 37.57% domestic shares planned for conversion will not actually circulate in the short term, the secondary market has provided real feedback from investors—selling off. On November 11, 2025, BAMA TEA's closing price was only HKD 51.8 per share, meaning that the company's stock plummeted over 50% from a high of HKD 115 per share within just 9 trading days, quickly falling below the issue price. It is worth noting that the Hong Kong stock market's indifferent attitude towards tea companies has precedent. Lincang Ancient Tea, which went public at the end of 2023, reported an annual loss of approximately RMB 308 million for its shareholders in 2024, and its stock price has also remained sluggish, with a cumulative decline of 50%-70%. **Going public ≠ a way out** **Slowing growth momentum, narrowing profit margins** In fact, the sharp fluctuations in stock prices are essentially a concentrated exposure of the company's fundamental operational issues. From the financial data, BAMA TEA's growth momentum has gradually slowed, and there are signs of declining profitability. From 2022 to 2024, the company's operating revenue increased from RMB 1.818 billion to RMB 2.143 billion, but the growth rate decreased year by year, with only a 1% increase in 2024, indicating stagnation in growth. The performance in the first half of 2025 further deteriorated. According to the prospectus data, the operating revenue for the period was RMB 1.063 billion, a year-on-year decrease of 4.2%; net profit was RMB 120 million, with a year-on-year decline of as much as 17.8%. Although the company's gross profit margin remained at a relatively high level, reaching 55.27% in the first half of 2025, higher than 52.3% in 2023 and 55.0% in 2024, the net profit margin was only 11.29%, and the growth rate turned negative, casting a shadow over the growth story of the "high-end tea scarcity track." High expenses have become an important factor eroding profits. The prospectus shows that in the first half of 2025, the company's sales and marketing expenses reached RMB 332 million, accounting for 31.2% of operating revenue; administrative expenses were approximately RMB 91.415 million, accounting for about 8.6%. As the core engine for the scaled expansion of BAMA TEA, the franchise model has not only driven the growth of store numbers but has also gradually exposed many issues, becoming an important factor restricting the company's development. According to the prospectus, as of the last actual feasible date before the IPO, BAMA TEA had 3,716 offline stores, of which 3,482 were franchise stores, accounting for approximately 93.7%, while directly operated stores numbered only 234, accounting for less than 6.3%. BAMA TEA is also aware of the hidden dangers behind this situation, as it frankly stated in the prospectus: "Most of our revenue comes from our franchisees. If we fail to properly manage our franchisees or if the franchisees do not operate successfully, our business, financial condition, and operating performance may be significantly adversely affected." However, the sales to franchisees have supported half of BAMA TEA's revenue. From 2022 to 2024 and in the first half of 2025, the revenue obtained from sales to franchisees accounted for 50.2%, 50.6%, 50.9%, and 49.1% of the company's total revenue, respectively. The slowdown in store expansion may be a clear signal. In the first three quarters of 2024, BAMA TEA added only 170 franchise stores, far below the 475 new stores added in 2023. More concerning is that the average purchase amount per store for franchisees dropped from 353,600 yuan in 2022 to 253,700 yuan in the first three quarters of 2024, a decrease of 28.25%, directly leading to a slight increase of only 0.2% in revenue from the franchise channel. In response, Bai Wenxi, Chief Economist of the China Enterprise Capital Alliance, stated: "This means that the flywheel of 'stores driving sales' has begun to reverse—net store growth slows → single-store sales decline → company shipments decrease → revenue and profit double kill. To clear inventory, some franchisees are selling at low prices, which in turn impacts the company's pricing system and brand premium, creating a negative cycle." However, it is undeniable that BAMA TEA holds a leading position in the three major categories of black tea, rock tea, and Tieguanyin. Public information shows that BAMA TEA's sales revenue from Tieguanyin has ranked first in the country for over 10 consecutive years, Wuyi rock tea has led the nation for 5 years, and black tea has been the national leader for 4 years. To break through the growth bottleneck in the high-end market, BAMA TEA plans to allocate the funds raised from the IPO to three major areas: building brand flagship stores in high-tier cities, deepening franchise coverage in lower-tier markets; upgrading the supply chain and smart factories to consolidate standardized barriers; and promoting brand building and international expansion, prioritizing markets in Southeast Asia and countries along the "Belt and Road" initiative. However, the effectiveness of these strategies still needs time to be tested. Currently, BAMA TEA faces ongoing fluctuations in market value. Since its listing, the capital market's attitude towards BAMA TEA has shifted, not denying the value of the Chinese tea industry, but rather re-examining its business model and growth logic Against the backdrop of consumption upgrading and the enhancement of cultural confidence, how to break the curse of "listing is the peak" and how to gain long-term favor from capital are the core issues that BAMA TEA urgently needs to address ### Related Stocks - [BAMA TEA (06980.HK)](https://longbridge.com/en/quote/06980.HK.md) ## Related News & Research - [Sugar Prices Fall on Weakness in Crude Oil](https://longbridge.com/en/news/281402179.md) - [Pony AI Registers Over 43 Million Shares for 2026 Equity Incentive Plan](https://longbridge.com/en/news/281543345.md) - [Is It Too Late To Consider Winmark (WINA) After Its Strong 1-Year Share Price Run?](https://longbridge.com/en/news/281537142.md) - [Somi Conveyor Confirms SEBI-Compliant Dematerialization of Securities for Q4 FY26](https://longbridge.com/en/news/281688764.md) - [10:44 ETFast-Acting Covalent Protein Drugs From a New High-Throughput Platform](https://longbridge.com/en/news/281647164.md)