Thai President Foods Public Company Limited’s (SET: TFMAMA) recent acquisition of a 51% stake in the Thai franchise of CHAGEE signals a bold bet on the fast-growing, premium tea market as the Chinese tea innovator accelerates its global push. As part of this strategic move, TFMAMA aligns itself with a brand that has rapidly risen to prominence in China’s steadily evolving tea sector since its launch in 2017.
CHAGEE (NASDAQ: CHA) has carved out its place as a trailblazer in modern tea culture, blending traditional recipes with contemporary retail experiences powered by technology and eye-catching branding. The company’s first-quarter 2025 results underscore robust momentum. Net revenues surged 35.4% year-on-year to RMB3,392.7 million (US$467.5 million), hitching a lift on aggressive franchised teahouse expansion and a flurry of new company-operated store openings.
The network of CHAGEE teahouses ballooned to 6,681 outlets as of March 31, 2025, marking a 63.6% leap from a year earlier. This includes new markets abroad: in Malaysia and Singapore alone, a combined 13 outlets were added this quarter, while the Thai market remained steady at two stores—a figure that TFMAMA could be looking to scale up under its majority stake.
Notably, franchised locations provided strong revenue lift, accounting for a 31.8% year-on-year gain. Meanwhile, revenues from company-owned teahouses soared by a remarkable 107.7%, a testament to CHAGEE’s aggressive expansion drive. These efforts propelled total GMV to RMB8,226.8 million, a 38% jump from the same period last year.
However, the company’s rapid footprint expansion came at the cost of shrinking profit margins. Operating income margin slipped to 24.2%, down from 28.2% a year prior, while net income margin narrowed to 20.0% from 23.7%. Despite reporting a net income increase of 13.8% to RMB677.3 million (US$93.3 million), total operating expenses had raced ahead—climbing 42.8%. Key cost contributors included a 170% spike in company-owned store operating expenses and a 166% surge in sales and marketing expenditure, reflecting ambitious campaigns and team growth.
Importantly for franchise partners such as TFMAMA, underlying store performance showed mixed signs: average monthly GMV (gross merchandise value) per teahouse in Greater China slipped to RMB431,973, and same-store sales experienced an 18.9% decline, indicating intensifying competition and maturation in core markets.
Yet, CHAGEE’s financial resilience remains intact. As of end-Q1 2025, the company reported a robust cash position of RMB5,392.4 million (US$743.1 million), providing ample liquidity to fuel further international expansion.
For TFMAMA, anchoring CHAGEE’s Thailand presence unlocks new growth avenues beyond its core instant noodle portfolio and taps rising demand for premium beverage experiences among Thai consumers.
As CHAGEE continues to extend its global reach—now with TFMAMA in the driver’s seat in Thailand—the spotlight will be on whether operational efficiencies and local adaptation can restore margin strength while sustaining brisk top-line growth. The Thai market, with just two locations to date, stands out as a key frontier for the next phase in CHAGEE’s ambitious journey.
