Good News on Listing | Frost & Sullivan Assists Bama Tea Industry Co., Ltd. to Successfully Go Public in Hong Kong (6980.HK)

Bama Tea Industry Co., Ltd. (hereinafter referred to as 'Bama Tea Industry') successfully went public on October 28, 2025. The company plans to issue 9 million H shares, of which 90% will be international offerings and 10% will be public offerings. The maximum issue price per share is HK$50.00, and the net proceeds from the fundraising are expected to be approximately HK$450 million.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support and highlight the issuer's competitive advantages, assisting the issuer, investment banks and other intermediaries in completing the writing of relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

Frost & Sullivan has always been a leader in helping companies go public in Hong Kong. According to LiveReport's big data (statistical data as of September 30, 2025), from January to September 2025, as well as during the past 12 and 36 months, Frost & Sullivan provided listing industry advisory services to 47 (market share 72%), 62 (market share 69%), and 162 (market share 70%) Hong Kong-listed IPOs respectively, ranking first in terms of number. It has a wealth of industry experience and communication skills with regulatory authorities, exchanges, investment and financing institutions, and various related institutions.

• The company is China's leading and rapidly growing high-end tea enterprise, having become one of the most well-known tea brands in China;

   

• The company creates a full range of high-quality products with proprietary skills and innovative R&D;

   

• The company's omni-channel sales network and high-quality service guarantee business continue to expand;

   

• The company has vigorously expanded its customer base through forward-looking market layout and flexible diversified marketing strategies;

   

• The company constructs a robust operational system with highly digitalized, standardized, and stable supply chains;

   

• The company leverages an experienced and visionary management team, corporate culture, and a talented workforce as its source of strength.

According to a report by Frost & Sullivan:

• Based on sales revenue, the company's market share in China's high-end tea market is about 1.7% in 2024, ranking first;

   

• Based on sales revenue, the company's market share in China's oolong tea market is about 2.1% in 2024, ranking first;

   

• Based on sales revenue, the company's market share in China's black tea market was about 0.8% in 2014, ranking first;

   

• Ranked first among Chinese tea companies in terms of the number of chain stores in 2024;

   

• Ranked first among Chinese high-end tea companies by the number of franchisees, the company is poised for further growth in 2024.

China has a long history of drinking tea that dates back thousands of years, making tea an indispensable part of the daily lives of Chinese people to this day, maintaining a stable demand for tea. China's vibrant tea culture and its deeply rooted historical importance in tea consumption greatly stimulate domestic demand for tea.

The tea market in China consists of three sub-sectors: tea products, ready-to-drink tea beverages, and instant tea. Tea products can be further divided into raw leaf tea products and reprocessed tea products (including flavored teas, tea bags, and tea powder). Ready-to-drink tea beverages refer to teas that are mixed with different ingredients (including fruits, 'pearls' (cassava balls), foam cream cheese, milk, and any other edible ingredients). Instant tea is a ready-made, packaged, and ready-to-drink tea product, usually sweetened and available in various flavors such as fruit and floral.

The following figure shows the market size of the Chinese tea market by category from 2020 to 2029:

The tea market accounted for the largest share of the Chinese tea market from 2020 to 2024. Tea products in China are mainly divided into six categories: oolong tea, black tea, dark tea, white tea, green tea, and yellow tea.

The following chart shows the market size of the Chinese tea market by tea type from 2020 to 2029:

The market scale of oolong tea, dark tea, white tea, and yellow tea markets from 2020 to 2024 differs from the compound annual growth rate from 2024 to 2029 due to the following factors:

●Oolong teaThe COVID-19 pandemic in the first quarter of 2020 had a negative impact on the production and distribution of oolong tea, leading to a significant accumulation of inventory in oolong tea-producing areas and a marked decline in inventory turnover rates. The remaining inventory of oolong tea increased the cost of capital occupation, prompting some participants in the oolong tea market to lower product prices in order to obtain cash inflows and maintain operations. In addition, the government encouraged large-scale production and mechanized processing of tea products in oolong tea-producing areas (such as Anxi County, Fujian Province) to improve production efficiency. Capacity expansion put pressure on market prices. As a result, the domestic average selling price of oolong tea decreased by 6.8% and 11.2% in 2020 and 2021, respectively, with domestic sales falling by 5.4% and 7.6% in 2020 and 2021, respectively. The Chinese oolong tea market gradually recovered in 2022 and 2023, with year-on-year growth rates of about 9.7% and 9.3%, respectively, eventually reaching a compound annual growth rate of 2.5% from 2020 to 2024. During the forecast period from 2024 to 2029, the compound annual growth rate of the oolong tea market is expected to be 6.1%, attributed to the continuous consumption of traditional oolong tea, as well as the increasing demand driven by its widespread use in sugar-free tea beverages and ready-made tea drinks. This is due to its popular taste as a semi-fermented tea, unique aroma, and various health benefits.

● Dark teaFrom 2020 to 2023, fluctuations in the selling price and sales revenue of black tea did not accurately reflect market dynamics. These fluctuations were the result of a combination of various unpredictable factors, including extreme weather conditions in major producing areas, the impact of COVID-19, and speculative activities that led to sudden increases in product prices. In 2020, the destructive impact of COVID-19 on production and distribution was exacerbated by extreme weather events, such as long-term drought in the Pu'er tea-producing areas of Yunnan Province, early spring frosts and floods in Anhua region of Yunnan Province. These events severely affected the yield and quality of black tea, driving up raw material and labor costs. As a result, in 2020, the selling price and sales revenue of black tea recorded significant year-on-year increases of approximately 48.9% and 48.8%, respectively. In addition, black tea, especially Pu'er tea, stood out due to its unique investment attributes and pricing sensitivity (which are greatly influenced by production years and regions). Since black tea undergoes natural post-fermentation, its value usually increases over time, so aged products are typically more expensive. This potential attracted speculative investors, leading to an unexpected increase in demand, soaring prices, and fluctuations. Therefore, from 2021 to 2023, the average selling price of black tea recorded year-on-year increases of -20.8%, 17.6%, and 7.5%, respectively. During the forecast period from 2024 to 2029, as the black tea market matures and the impact of unpredictable speculative activities is eliminated, growth is expected to stabilize on a more reasonable and sustainable path. It is anticipated that investors' focus will shift from short-term price speculation to long-term value drivers such as quality, origin, and cultural significance. Therefore, the market size of the Chinese black tea market is expected to grow at a moderate compound annual growth rate of approximately 7.8% from 2024 to 2029.

● White tea and yellow teaWhite tea and yellow tea belong to a relatively small niche market, with sales revenue in 2024 being approximately RMB 10.4 billion and RMB 2.9 billion respectively, accounting for 3.2% and 0.9% of the overall Chinese tea market. Due to the relatively small market size, even a slight increase in the absolute value of the market size can lead to a disproportionately large percentage increase. Specifically, in terms of sales revenue, the significant year-on-year growth of 42.2% and 69.9% in white tea and yellow tea in 2020 were important factors in their astonishing growth from 2020 to 2023. The significant growth in 2020 was driven by joint policy incentives and technological progress. Both types of tea benefited from the national support policies for 'small-scale specialty agricultural products,' with Fujian Province, Yunnan Province, and other places mainly producing white tea, while Anhui Province, Sichuan Province, and other places mainly producing yellow tea. Local governments actively promoted the expansion of tea garden areas through subsidies, free distribution of tea tree seeds, and other measures. In addition, the implementation of dwarfing and dense planting techniques for white tea effectively increased production capacity. Moreover, the year-on-year growth rate of yellow tea sales revenue soared to about 114.5% in 2023. This growth was driven by precise policy and technological innovation. To support yellow tea production, the Chinese government provided financial aid, including subsidies for fertilizer purchases and biological pesticides, as well as financial support for cultivating excellent varieties and improving planting techniques. In addition, revolutionary technological progress can effectively shorten the picking and production cycles of yellow tea, thereby increasing production. In the coming period, as the production capacity of white tea and yellow tea stabilizes and the market size expands, their expected growth rate is expected to return to a moderate upward trend.

From 2020 to 2024, the compound annual growth rate of the high-end tea market in China, measured by sales revenue, was about 3.7%, increasing from approximately RMB 89 billion to about RMB 103 billion. The growth was mainly due to consumers' willingness to pursue overall health and self-care, as well as their high demand for high-quality tea. The characteristics of high-end tea include strict requirements for raw material selection, production processes, storage methods, and packaging, resulting in higher product prices. High-end tea brands typically have a higher customer loyalty and a level of high-quality customer service. In contrast, the growth of the mass tea segment has been relatively slower. The root cause is that with increased disposable income and enhanced health awareness, more customers are gradually shifting from mass non-branded tea to trustworthy teas. By 2029, the market size of the mass tea segment is expected to reach approximately RMB 169 billion in sales revenue, while the market size of the high-end tea segment is expected to increase to approximately RMB 1353 billion in sales revenue. This shift highlights the growing emphasis on quality and brand awareness among Chinese tea consumers, further driving the expansion of the high-end tea segment.

● A solid preference for tea and a continuously increasing recognition of tea culture

Middle-aged and elderly consumers are a key demographic in the high-end tea market, who often deeply integrate tea drinking into their daily life rituals. Their high loyalty to specific tea categories provides a stable source of recurring income for producers and retailers, helping to maintain market growth even during economic downturns. Moreover, this group tends to purchase teas with excellent quality and cultural heritage due to their higher economic comfort levels. Therefore, for these consumers, high-end teas are often used as a medium in formal tea gatherings to strengthen social bonds and meet the deep interaction needs among peers. On the other hand, young consumers' interest in high-end teas is growing due to changes in lifestyle preferences and continuous product innovation. Tea is seen as a healthier alternative to sugary drinks and high-caffeine beverages, and it is more attractive to young consumers due to its antioxidant properties, moderate caffeine content, and various health benefits. Specifically, tea naturally contains caffeine, with concentrations typically ranging from 2% to 4%. The caffeine content in several types of tea can be as high as 5.5%. However, since tea is usually brewed whole, the release of caffeine is slower. In addition, compounds such as polyphenols and theanine interact with caffeine, slowing down its absorption. The gradual release of caffeine and the interaction between polyphenols and theanine with caffeine result in a milder and more sustained energizing effect in tea without causing nervous discomfort. High-end teas are usually produced in regions with ideal climate, soil, and altitude conditions, containing higher concentrations of beneficial compounds, thus attracting young consumers. Moreover, the expansion of e-commerce channels and strategic use of social media marketing make it easier for young consumers to explore the cultural heritage and stories behind high-end tea brands, thereby cultivating stronger emotional connections and brand loyalty.

● Increasing attention is being paid to overall health and self-care

As Chinese people increasingly realize the connection between tea and overall health and self-care, their preference for natural functional foods and beverages such as tea is growing. Tea categories such as oolong tea and herbal tea are highly regarded for their many health benefits. In particular, the general awareness and preference for drinking tea are expected to promote growth in the high-end tea market. High-end teas usually come from specific regions with ideal climate, soil conditions, and altitude, resulting in higher concentrations of beneficial compounds. Unlike mass-market tea products, high-end teas are made by skilled tea artists using traditional techniques, preserving the natural characteristics of the tea leaves. Moreover, high-end teas have significant cultural value, reflecting consumers' refined cultural taste and their longing for a high-quality lifestyle.

● Diversified consumer groups

With the increasing focus on health and the preference for natural and wellness products, young consumers and female consumers are increasingly favoring tea consumption. Conveniently customizable tea drinks have emerged to cater to their fast-paced urban lifestyle. Social media and influencer culture have further fueled this trend. As a result, many tea brands have launched new products to meet these growing consumer preferences and needs.

● The evolution of tea branding and high-endization

Well-known tea brands have successively launched high-end tea products, emphasizing their origin, exquisite craftsmanship, and the cultural significance of each tea. Brands with a long history, rich brand culture, and high quality place emphasis on history and culture in brand promotion and marketing activities. These brand narratives not only enhance the perceived value of tea but also establish a stronger emotional connection between the brand and consumers, positioning high-end tea as a cultural choice that transcends basic consumer goods.

●The globalization of Chinese tea

According to Frost & Sullivan data, in 2024, China's tea exports reached approximately 400,000 tons, generating about $1.4 billion in revenue. As Chinese tea (especially high-end tea) captivates the world, China's tea exports are expected to grow further. Overseas markets, especially North America, Europe, and Southeast Asia, will continue to seek high-quality Chinese tea. Chinese tea manufacturers will focus on expanding their international influence, collaborating with global distributors, and customizing products to meet the diverse tastes and preferences of different regions.

● Growing demand for high-end and rare teas

With the increase in disposable income, Chinese consumers are paying increasing attention to the quality and origin of tea. The demand for high-end tea and rare varieties is expected to rise. More and more domestic and international consumers are willing to increase their purchases of such teas.

● Online tea purchasing and recommendations

E-commerce will continue to be a growing sales channel for tea products, especially favored by online shoppers. Digital tools that allow consumers to search for various types of tea will become increasingly common. In addition, marketing methods such as live streaming will continue to play an important role in the digital field, enabling tea brands to interact with consumers and display new products in real time.

● Tea blending and creativity

To meet consumers' ever-changing preferences, we will continue to explore tea blending and flavor innovation. Products that combine traditional teas with herbal plants, flowers, fruits, and spices to create unique flavors will be popular, especially among young consumers. As consumers seek personalized tea experiences, customization and personalization will play a key role in the future market.

●Tea Culture Experience and Tea Tasting Space

By establishing a tea tasting space, tea brands not only sell products but also provide a unique environment to immerse consumers in a rich and sophisticated tea culture. This strategy enhances the brand's cultural connotation and makes its image more attractive. In addition, entering the tea tasting space allows consumers to deepen their connection with the brand through tasting, participating in activities, and social interactions. This multi-level interaction goes beyond mere product transactions, including culture, emotion, and social interaction. This comprehensive engagement plays a crucial role in fostering stronger customer bonds.

● Brand building and marketing

In the long-standing tea market, building brand awareness and recommending new or niche teas to consumers is challenging. Effective marketing strategies and established brand awareness require not only emphasizing product quality but also conveying touching stories about the brand's history, origin, and unique selling points. This may necessitate substantial investment in advertising, content creation, collaborations with big names, and consumer interactions through platforms. In a market filled with competitors and fierce competition, it is difficult to stand out and gain exposure without top-quality products, solid marketing strategies, and brand influence.

● Cross-regional and omnichannel operations

The sales network of tea products is diverse, involving traditional specialty stores, wholesalers, distributors, and emerging e-commerce platforms. Sales channels are closely related to regional preferences and consumption patterns, requiring a deep understanding of local conditions and networks to successfully enter relevant markets. To navigate these diverse channels and establish partnerships with distributors, franchisees, retailers, and online platforms, one needs strong cross-regional operational capabilities and a wide range of products suitable for consumers from different regions. For newcomers, this process is time-consuming and requires significant resources.

● Offer a full range of products to meet consumer preferences

Chinese consumers' tea-drinking preferences have distinct regional characteristics, deeply influenced by regional traditions, historical customs, and personal living habits. Tea-drinking habits vary by region, with different flavors and brewing methods. For example, Zhejiang Province has a special affection for Longjing tea, while Fujian Province is renowned for its oolong tea. To successfully cater to the preferences of different regions, newcomers must make market layouts for a full range of products to grasp local tastes, integrate traditions, and understand the complexity of various tea cultures. In addition, small enterprises may have limited capabilities in providing a full range of tea products, which could hinder their expansion efforts nationwide.

●Supply of high-quality raw materials

China's high-quality tea gardens (including those in Fujian, Zhejiang, Yunnan, and Anhui provinces) produce several of the most sought-after tea varieties. Established tea companies usually operate in these regions, not only supervising the cultivation of tea trees but also obtaining the right to pick tea from prime planting sites. These companies maintain close ties with local farmers and regional cooperatives, holding long-term contracts and exclusive procurement agreements with tea farmers. This enables them to secure a stable supply of high-quality tea in advance. Therefore, the dominant position of established tea companies in major tea garden areas poses challenges to new participants seeking high-quality raw materials.