--- title: "489 stores + over 9% net profit margin, Green Tea Group is in the process of IPO on the Hong Kong stock market, officially listed on May 16." type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/29472876.md" description: "Summary: The fundamentals of Green Tea Restaurant are average. Compared to Xiaocaiyuan, which has a similar situation, the 13.8x P/E valuation is relatively reasonable and has some upside potential. Pay attention to the margin data to gauge market sentiment. As of the time of writing (May 9th, afternoon), the financing subscription multiple was 32.98x, with a subscription amount of 3.992 billion, and the expected subscription multiple is 70.44x. Company Overview Green Tea Group is a leading mass-market Chinese restaurant chain brand in China, with "high-value fusion cuisine + traditional Chinese dining experience" as its core feature. Since opening its first store by West Lake in Hangzhou in 2008..." datetime: "2025-05-09T08:02:50.000Z" locales: - [en](https://longbridge.com/en/topics/29472876.md) - [zh-CN](https://longbridge.com/zh-CN/topics/29472876.md) - [zh-HK](https://longbridge.com/zh-HK/topics/29472876.md) author: "[新股雷达站](https://longbridge.com/en/profiles/18605128.md)" generator: "portal-rs" --- # 489 stores + over 9% net profit margin, Green Tea Group is in the process of IPO on the Hong Kong stock market, officially listed on May 16. **Summary:** The fundamentals of Green Tea Restaurant are average. Compared to Xiaocaiyuan with similar conditions, the valuation of 13.8 times P/E is relatively reasonable and has some upside potential. Pay attention to the margin data to gauge market sentiment. As of the time of writing (May 9th afternoon), the financing subscription multiple was 32.98 times, with a subscription amount of 3.992 billion yuan, and the expected subscription multiple is 70.44 times. **Company Overview** Green Tea Group is a leading mass-market Chinese restaurant chain brand in China, with "**affordable fusion cuisine + traditional Chinese dining experience**" as its core feature. Since opening its first store by West Lake in Hangzhou in 2008, the company has continuously provided customers with great value through innovative dishes that blend regional flavors and elegant Chinese-style environments. **Core Products and Market Potential** Green Tea Group primarily generates revenue through dine-in (about 80%) and takeout services. The average per-person spending at Green Tea Restaurant ranges from 50 to 70 yuan, offering 50 to 80 dishes, including signature dishes, appetizers, soups, main courses, vegetarian dishes, desserts, and beverages. Popular dishes include Shrimp Wrapped in Vermicelli, Dongpo Pork Ribs, Green Tea Roasted Pork, Stone Pot Chicken Tofu Soup, Green Tea Roasted Chicken, and Bread. As of now, Green Tea Group operates 489 restaurants across 21 provinces, 4 municipalities, and 2 autonomous regions, covering all first-tier cities in China, 15 new first-tier cities, 31 second-tier cities, and 90 third-tier and below cities. Casual Chinese restaurants have rapidly risen due to their affordability, comfortable environments, and convenient services. The market size grew from 351.3 billion yuan in 2020 to 534.7 billion yuan in 2024 (CAGR 11.1%) and is expected to reach 826.1 billion yuan by 2028 (CAGR 6.9%), increasing its share of the Chinese dining market from 16.0% to 17.4%, making it the fastest-growing segment. In 2024, the casual Chinese restaurant market in mainland China was highly fragmented, with the top five brands accounting for only 3.9% of the market share. Green Tea ranked fourth with revenue of 3.838 billion yuan (0.7% share) and third with 465 stores. **Financial Performance** **Revenue:** From 2022 to 2024, the company achieved revenues of 2.375 billion yuan, 3.589 billion yuan, and 3.838 billion yuan, with year-on-year growth rates of 3.61%, 51.09%, and 6.94%, respectively. **Profit:** Due to COVID-19, the group's net profit saw a significant decline in 2022 but quickly recovered. During the reporting period, the company maintained high growth in annual profits, with net profits of 165.79 million yuan, 296 million yuan, and 350 million yuan from 2022 to 2024, and net profit margins of 0.70%, 8.23%, and 9.12%, respectively. After adjusting for non-cash items, the group's adjusted net profits for the same period were 25 million yuan, 300 million yuan, and 360 million yuan, with corresponding adjusted net profit margins of 1.1%, 8.5%, and 9.4%. **Cash Reserves and Financial Pressure:** The group's cash reserves are decent, with cash and equivalents totaling 3.4 billion yuan as of March 31, 2025. However, the company plans to open 150, 200, and 213 new restaurants in 2025, 2026, and 2027, respectively, which brings significant financial pressure due to rapid expansion. The group's debt level is not high, with total current liabilities of 760 million yuan and net current assets of 21.1 million yuan as of the same period. **Core Operational Metrics:** The store closure rate rose to 3.2% in 2024, compared to an average of 1.5% from 2021 to 2023. The group's per-store efficiency is under pressure. **IPO Fund Usage:** Approximately 63.3% will be used for restaurant network expansion; About 26.3% will be allocated to establishing central food processing facilities; Around 5.4% will be used for upgrading IT systems and related infrastructure; About 5.0% will be reserved for working capital and other general corporate purposes. **Investment Highlights - Standardized Expansion Model 01** Through a "centralized processing + direct procurement" supply chain system, the company achieves standardized flavors and cost optimization, supporting rapid expansion. As of the latest data, its 489 stores cover all first-tier cities and over 130 lower-tier cities in China, extending to the Hong Kong market. **\- Continuous Performance Improvement 02** Revenue increased from 2.375 billion yuan in 2022 to 3.838 billion yuan in 2024, with gross margin rising from 63.7% to 68.92% and net profit margin jumping from 0.7% to 9.12%, indicating enhanced profitability. **\- Differentiated Advantages 03** Green Tea Group lags behind leading companies like Xiaocaiyuan in terms of revenue scale and store count but holds a differentiated advantage in lower-tier markets due to its affordability. It ranks first in the casual Chinese fusion cuisine segment, avoiding intense competition through its unique positioning. **\- Cornerstone Investor Lineup 04** Cornerstone investors subscribed to 55.57% of the shares, with an over-allotment option of 15%, providing short-term stock price support. **Risk Concerns - Declining Per-Store Performance, Growth Reliant on Expansion 01** In 2024, daily sales per store, customer traffic, and table turnover rates all declined. Revenue growth was mainly driven by new store openings (+29.2%). Dine-in revenue grew by only 1.28%, while takeout revenue grew by 26.6%, becoming the primary growth driver. Combined with food safety risks associated with pre-made dishes, this poses challenges for sustained growth. **\- Aggressive Expansion Leading to Financial Pressure 02** In 2024, 120 new stores were opened at an investment cost of 270 million yuan, leaving only 247 million yuan in cash by year-end. From 2025 to 2027, an additional 1.4 billion yuan (350-550 million yuan annually) is expected to be needed for expansion, creating a significant funding gap. Moreover, the profitability model in lower-tier markets remains unverified, with rent and labor costs exceeding 60%, potentially eroding profits. **\- Controversial Large Dividends Before IPO 03** In 2023, dividends of 350 million yuan were distributed (the founding family received 251 million yuan), depleting cash that could have been used for expansion. The group's simultaneous pursuit of IPO fundraising and large dividends may affect market confidence and the listing process. ### Related Stocks - [00999.HK](https://longbridge.com/en/quote/00999.HK.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**