Chagee Holdings Reports Over 50% Net Income Drop in 2025 Amidst Sales Decline and New IPO Lawsuits
CHA sits 22% above its 52-week low of $8.98.
Summary
Chagee Holdings Ltd. reported a significant decline in net income and negative same-store sales growth for fiscal year 2025, alongside the disclosure of new class-action lawsuits challenging its IPO registration statement.
Key Events · Earnings and Guidance · CHA
-
Financial Performance Decline
Net income decreased by over 50% to RMB1.19 billion (US$169.6 million) in 2025 from RMB2.51 billion in 2024. Same-store GMV growth turned negative at (24.2)% in 2025, down from 2.7% in 2024. Total net revenues increased by a modest 4.0% to RMB12.91 billion (US$1.85 billion).
-
Teahouse Network Expansion Continues
The company expanded its network by 1,013 teahouses, reaching 7,453 globally by year-end 2025, with total GMV increasing by 7.2%. However, average monthly GMV per teahouse in China decreased from RMB512 thousand in 2024 to RMB387 thousand in 2025.
-
New Class-Action Lawsuits Disclosed
Two class-action lawsuits were filed in February 2026, consolidated in April 2026, alleging the IPO registration statement was materially false and misleading due to undisclosed adverse impacts of price competition between major Chinese food delivery services. The company is currently unable to predict the outcome or estimate possible losses.
-
Internal Control Weakness Remediated
The material weakness in internal control over financial reporting identified in 2024, related to insufficient U.S. GAAP knowledge, was remediated as of December 31, 2025.
Analysis · CHA · Trade & Services
The 20-F filing reveals a challenging year for Chagee Holdings, marked by a substantial decline in net income and a significant negative shift in same-store sales growth, indicating operational pressures despite continued network expansion. The disclosure of new class-action lawsuits alleging material misrepresentations in the IPO registration statement introduces considerable legal and reputational risk, creating uncertainty for investors. While the company successfully remediated a previously identified material weakness in internal controls, the overall financial performance and the emerging legal challenges are critical concerns that could impact investor confidence and future stock performance. The dual-class share structure further concentrates voting power with the CEO, limiting the influence of other shareholders.
At the time of this filing, CHA was trading at $10.93 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $2B. The 52-week trading range was $8.98 to $39.47. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.