BAMA TEA Reports Revenue and Profit Growth in H1; Net Decrease of 9 Company-Owned Stores

On the evening of August 18, BAMA TEA (06980.HK) released its interim results for 2026. In the first half of the year, the company achieved revenue of RMB 1.402 billion, a year-on-year increase of 31.8%; gross profit amounted to RMB 765 million, up 30.3%; and profit attributable to shareholders reached RMB 198 million, representing a 65.3% increase.

The profit growth rate was significantly higher than the revenue growth rate, but this was not due to an improvement in gross margin. The company's gross margin for the first half was 54.6%, a year-on-year decrease of 0.7 percentage points. The announcement attributed this to transportation and warehousing costs rising at a faster rate than revenue.

The improvement in profit margin was primarily driven by operating expenses growing at a slower pace than revenue. Sales and marketing expenses totaled RMB 397 million, a year-on-year increase of 19.6%, with their share of revenue dropping from 31.2% to 28.4%. Administrative expenses grew by 8.2% to RMB 98.92 million, with their proportion decreasing from 8.6% to 7.1%. However, advertising and promotion expenses rose to RMB 193 million, an increase of approximately 39.5%, which exceeded the revenue growth rate.

In terms of channels, offline revenue reached RMB 886 million, a year-on-year increase of 29.7%, accounting for 63.2% of total revenue. Online revenue amounted to RMB 512 million, up 36.1%, with its share rising to 36.5%. The company stated that offline growth was mainly driven by increased purchases from franchisees and customized procurement by key accounts, while online growth was fueled by e-commerce, live streaming, and influencer recommendations.

As of the end of June, BAMA TEA operated 3,845 stores, an increase of 260 year-on-year, comprising 3,619 franchise stores and 226 company-owned stores. Notably, the net increase in stores during the first half of the year was actually 72: franchise stores increased by a net of 81, while company-owned stores decreased by a net of 9, indicating that network expansion remains predominantly franchise-driven.

From a product perspective, tea product revenue totaled RMB 1.29 billion, a year-on-year increase of 34.5%, accounting for 92% of total revenue. Among these, oolong tea revenue reached RMB 465 million, up 52.3%; black tea revenue was RMB 282 million, up 37.7%; while green tea and white tea revenues declined by 0.9% and 5.8%, respectively. Revenue from the core "BAMA" brand amounted to RMB 1.266 billion, up 35.0%, accounting for approximately 90% of total revenue. The "Xinjihao" and "Wanshanhong" brands grew by 9.9% and 1.5% respectively, indicating that the scale of its multi-brand business remains relatively limited.

On the supply side, revenue from self-produced products reached RMB 850 million, up 43.0%, with the share of self-produced sales rising from 56.1% to 60.8%. Revenue from third-party OEM products was RMB 548 million, an increase of 17.9%. As of the end of June, the company held cash and cash equivalents of RMB 1.079 billion with no bank borrowings. Capital expenditure for the first half amounted to RMB 40.3 million.

This interim report shows that BAMA TEA's growth was primarily driven by franchise procurement, online channels, and core categories, while a decline in expense ratios further boosted profit growth.

However, the announcement did not disclose same-store sales or terminal retail data for franchise stores. Therefore, growth in franchisee procurement cannot be directly equated with a synchronous improvement in terminal sell-through. In the second half of the year, store efficiency, the conversion of marketing investments, and changes in gross margin will remain key factors in observing the sustainability of its growth.