Update shared on 14 Dec 2025
Fair value Decreased 5.27%- Revenues did not grow in line with new teahouse openings, and average monthly GMV is down 30% from the previous year. Rate of teahouse growth per quarter is ~5%.
- Continued reduction in cost of materials, storage and logistics even as the company grows is impressive.
- Whilst cumulative memberships grew from last quarter by ~13m, the number of active users for the period dropped by 3.4m, suggesting a high rate of customer churn. Active members are down 22% from 1 year ago even as the number of teahouses is up 25% from that same period.
- The special cash dividend announcement seemed to inspire shareholder confidence, however I take a more cynical view that is may be being used to divert attention from declining results. Indeed the short term change in share price corrected after ex-dividend date.
- I still believe CHA is undervalued based on current results, but am considering the possibility that it could become fairly valued through increased costs and stable revenue (meaning falling average GMV) leading to a drop of value. I believe the current valuation would be fair even if sustained EBIT halved, so I maintain a hold on my position.
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