Goldman Sachs Chagee (CHA.NC): APAC Consumer & Leisure Corp Day—Re-accelerating Product Launches, Enhancing Operational Efficiency
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During Goldman Sachs' APAC Consumer and Leisure Corporate Day held in Hong Kong, management from Chagee (CHA.NC, Not Covered) outlined strategic initiatives to re-accelerate product development and optimize operations. The company indicated that fourth-quarter 2025 same-store sales growth (SSSG) remained under pressure, though December performance was supported by new product launches. Management expects the SSSG decline to narrow due to favorable base effects and the gradual impact of internal adjustments, though a significant recovery will require time.
For 2026, Chagee plans to continue expanding its store network in mainland China, though potentially at a slower pace than in 2025. The company is introducing a smaller store format, requiring capital expenditure of 700,000 to 800,000 RMB for 60–80 square meters of floor space. This format targets regions where brand awareness is already established. Management believes store closure risks remain manageable due to acceptable current productivity and returns.
The company intends to re-accelerate new product launches, targeting one to two items monthly, utilizing more diversified ingredients. A revised franchise fee structure is projected to improve franchisee margins by approximately 1 percentage point. Internationally, Chagee anticipates rapid expansion in 2026, focusing on ASEAN markets and the United States, with a planned entry into South Korea. The company expects overseas net losses to gradually narrow as it scales these new international operations.