HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>The core of Bama's business model is light-asset operation of "brand + channel". Bama is highly dependent on franchise model, but we’ve seen a diminishing marginal benefit of channel penetration.</li>
<li>Due to sluggish consumption environment, revenue of Bama could decline by 4% in 2025.From 2026 to 2027, as strategic adjustments take effect, Bama may resume growth of 3% to 5%.</li>
<li>Considering the decline in performance in 25H1 and the low valuation of traditional tea enterprises in the Hong Kong stock market, Bama’s valuation performance may be under pressure.</li>
</ul>


The core of Bama's business model is light-asset operation of "brand + channel". Bama is highly dependent on franchise model, but we’ve seen a diminishing marginal benefit of channel penetration.
Due to sluggish consumption environment, revenue of Bama could decline by 4% in 2025.From 2026 to 2027, as strategic adjustments take effect, Bama may resume growth of 3% to 5%.
Considering the decline in performance in 25H1 and the low valuation of traditional tea enterprises in the Hong Kong stock market, Bama’s valuation performance may be under pressure.


Pre-IPO Bama Tea (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>The most significant issue in the domestic tea industry is product standardization. This makes it difficult for tea companies to expand their market share and achieve economies of scale.</li>
<li>Bama’s revenue growth showed an upward trend, but the growth rate is declining. There're already signs of growth stagnation. High selling and marketing expenses will put pressure on profit margin.</li>
<li>Lancang and <a href="https://www.smartkarma.com/entities/tenfu-caymans-hldgs-co-ltd" target="_blank" data-smartkarma-citation="entities:5958:1" rel="noopener">Tenfu Caymans (6868 HK)</a> are comparable peers. Due to larger market share/revenue scale and higher profit margin in 24Q1-Q3, we think Bama’s valuation should be higher than peers.</li>
</ul>


The most significant issue in the domestic tea industry is product standardization. This makes it difficult for tea companies to expand their market share and achieve economies of scale.
Bama’s revenue growth showed an upward trend, but the growth rate is declining. There're already signs of growth stagnation. High selling and marketing expenses will put pressure on profit margin.
Lancang and Tenfu Caymans (6868 HK) are comparable peers. Due to larger market share/revenue scale and higher profit margin in 24Q1-Q3, we think Bama’s valuation should be higher than peers.


Pre-IPO Bama Tea - The Business Model, the Challenges and the Outlook

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Relative strength for MSCI EM is bottoming vs. MSCI EAFE despite continued global equity market weakness.  Although the MSCI EM's price index remains in a downtrend, we are seeing signs of outperformance ona a relative strength basis and would add incremental exposure. In this report we highlight attractive and actionable themes within EM.

Relative strength for MSCI EM is bottoming vs. MSCI EAFE despite continued global equity market weakness.  Although the MSCI EM's price index remains in a downtrend, we are seeing signs of outperformance ona a relative strength basis and would add incremental exposure. In this report we highlight attractive and actionable themes within EM.

EM Relative Strength Is Bottoming: Overweight

While the MSCI EM index remains in a well-defined downtrend, and we continue to recommend selectivity, we highlight several investable themes and actionable individual stock recommendations, including opportunities in Brazil, Russia, Norway, Thailand and India.

While the MSCI EM index remains in a well-defined downtrend, and we continue to recommend selectivity, we highlight several investable themes and actionable individual stock recommendations, including opportunities in Brazil, Russia, Norway, Thailand and India.

EM Strategy: Brazil Breaking Out, EM Energy Remains Attractive

This report highlights actionable themes across the EM universe, including: bullish inflections in the Russian and Thai markets, and a pullback opportunity in India's SENSEX.  We also highlight actionable setups in MSCI EM Energy and Materials sectors and within Taiwanese Financials/Banks.  Finally we uncover a number of attractive bottoms-up opportunities, sorted by sector and market-cap.

This report highlights actionable themes across the EM universe, including: bullish inflections in the Russian and Thai markets, and a pullback opportunity in India's SENSEX.  We also highlight actionable setups in MSCI EM Energy and Materials sectors and within Taiwanese Financials/Banks.  Finally we uncover a number of attractive bottoms-up opportunities, sorted by sector and market-cap.

EM Strategy: Russia and Thailand Bullishly Inflecting; Pullback Opportunity in India

China

Tenfu Cayman Holdings Co Ltd. is a traditional Chinese tea-product enterprise engaged in the sale and marketing of a comprehensive range of tea products. The Company's key products are tea leaves, tea snacks, and tea ware which are sold through a nationwide network of self-owned and thrid party owned retail outlets.

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Tenfu Caymans Hldgs (6868 HK)

Pre-IPO Bama Tea (PHIP Updates) - Some Points Worth the Attention

Bama's light-asset business model faces challenges with diminishing franchise benefits/declining revenue, but strategic adjustments could lead to...

Xinyao (Criss) Wang

Pre-IPO Bama Tea - The Business Model, the Challenges and the Outlook

China's tea industry face challenges in product standardization hindering market expansion. Bama's growth is slowing, with signs of stagnation...

Xinyao (Criss) Wang

EM Relative Strength Is Bottoming: Overweight

Relative strength for MSCI EM is bottoming vs. MSCI EAFE despite continued global equity market weakness. Although the MSCI EM's price index...

Vermilion Research

EM Strategy: Brazil Breaking Out, EM Energy Remains Attractive

While the MSCI EM index remains in a well-defined downtrend, and we continue to recommend selectivity, we highlight several investable themes and...

Vermilion Research

EM Strategy: Russia and Thailand Bullishly Inflecting; Pullback Opportunity in India

This report highlights actionable themes across the EM universe, including: bullish inflections in the Russian and Thai markets, and a pullback...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO Bama Tea (PHIP Updates) - Some Points Worth the Attention

​Bama's light-asset business model faces challenges with diminishing franchise benefits/declining revenue, but strategic adjustments could lead to...

Xinyao (Criss) Wang

Pre-IPO Bama Tea - The Business Model, the Challenges and the Outlook

​China's tea industry face challenges in product standardization hindering market expansion. Bama's growth is slowing, with signs of stagnation...

Xinyao (Criss) Wang

EM Relative Strength Is Bottoming: Overweight

Relative strength for MSCI EM is bottoming vs. MSCI EAFE despite continued global equity market weakness. Although the MSCI EM's price index...

Vermilion Research

EM Strategy: Brazil Breaking Out, EM Energy Remains Attractive

While the MSCI EM index remains in a well-defined downtrend, and we continue to recommend selectivity, we highlight several investable themes and...

Vermilion Research

EM Strategy: Russia and Thailand Bullishly Inflecting; Pullback Opportunity in India

This report highlights actionable themes across the EM universe, including: bullish inflections in the Russian and Thai markets, and a pullback...

Vermilion Research

Bama's light-asset business model faces challenges with diminishing franchise benefits/declining revenue, but strategic adjustments could lead to...

China's tea industry face challenges in product standardization hindering market expansion. Bama's growth is slowing, with signs of stagnation...