Huaxi: Initiate a "Buy" rating on BAMA TEA (06980) - The current development status and growth secrets of high-end tea enterprises.

Huaxi released a research report, covering for the first time, giving BAMA TEA (06980) a "buy" rating. BAMA TEA, as a leading enterprise in the domestic high-end tea industry, holds a favorable position in the industry's trend towards high-end and concentration with its clear brand matrix and channel advantages. Huaxi's main points are as follows: Industry outlook: Current industry opportunities are evident, with the company in a leading position The Chinese tea industry is in a structural upgrade phase of "overall decentralization and high-end concentration". Driven by consumption upgrades, the high-end tea market has high growth potential, and brand upscale will become a trend in the future. As a leading enterprise in the domestic high-end tea industry, BAMA TEA has a favorable position in the industry's trend towards high-end and concentration. Quality analysis: The company's marketing system is complete, with outstanding overall profitability From the current operating situation, although the company is facing dual pressures of macroeconomic fluctuations and intensified industry competition in the short term, a deep analysis of its fundamentals shows that the company's core competitiveness has not fundamentally changed. In terms of products, the clear positioning of the multi-brand matrix and mutual complementarity form a product layout covering the entire customer base; the offline "franchise + direct sales" dense network layout and online digital operation are deeply integrated, and the channel moat continues to deepen. The high-end product structure supports a stable gross profit margin of around 55%, and multiple profitability indicators are significantly better than industry peers. Future outlook: The company's key directions highly match industry development trends Looking ahead, the company's development path is clear: first, the company is expected to continue to increase its market share with its brand, channels, and process barriers; second, consumption upgrades will drive the expansion of demand for high-end tea, combined with the rise of young consumer groups and female customer groups, the company's product high-end and youthful transformation accurately align with the trend; third, the listing on the Hong Kong Stock Exchange will focus on capacity upgrading, brand promotion, channel expansion, and digital construction, injecting strong momentum for long-term growth. Risk warning Fairness of related party transactions, independence of company decisions, macroeconomic environment, raw material supply risks, market expansion falling short of expectations.