Single store revenue is under pressure, and the founder's dividend is nearly 900 million. Why is CHA.US (CHA.US) rushing to pay large dividends?

1.95 US dollars, about 14 yuan, the price of a movie ticket. This is the cash that CHA.US (CHA.US) plans to pay for each of its shares — on the evening of November 12, Beijing time, the NASDAQ-listed Chinese tea company announced that it will pay a special cash dividend of 1.95 US dollars per share, which is expected to arrive on December 4.

Based on a total share capital of about 191 million shares, this amount will be disbursed about 370 million US dollars. Based on the closing price of $12.33 the day before the announcement, this is equivalent to sending 15.8% of the market value to shareholders in a one-time cash.

What is more noteworthy is the latter half of the announcement: starting from fiscal year 2027, for three consecutive fiscal years, the annual dividend will not be less than 50% of the previous year's net profit. Why is a company that has only been listed for a year and a half and its stock price has dropped from $28 to around $12 in a hurry to send out cash?

The company whose stock price is falling short asked the opposite question

Let's first take a look at the company's current situation. For the whole of 2025, Bawang Chahime's revenue was 12.91 billion yuan, an increase of only 4%; net profit to her mother was 1,135 billion yuan, a drop of more than half. In the second quarter of 2026, revenue was 3.415 billion yuan, up only 2.5% year on year; same-store GMV, which best represents store business, fell 16.1% year on year.

A company with a double-digit decline in its stock price at the same store. The conventional script is to save money, shrink, and save profits to repair statements. Overlord Chahime did the opposite: directly disburse cash close to one-sixth of the market value.

Issued at $8, rushed to $41.8 on the first day, and now it's around $12, the market value has shrunk by more than half. The truth is that the dividend rate is surprisingly high. It's not that the dividends are particularly high; it's that the denominator collapsed first.

It's not generosity; it's a change of story

In the year it went public, Overlord Chahime told the growth story of “Oriental Starbucks,” and the valuation was calculated based on “how many stores will open next year.” Currently, the net increase of 7,639 stores worldwide in a single quarter is around 100. The growth story cannot be told. The market values it close to 7 times the price-earnings ratio — this is not the pricing of growth stocks; it is the pricing of mature consumer goods or even utilities.

This transition was not something that happened to the Overlord Chahime family. Almost all of the tea companies that have been listed for the past two years have faced the same treatment in the secondary market: no one is paying for the Wandian blueprint on the prospectus, and investors only ask one question — when and how did you give me the money in your account? Among the six listed tea companies in the first half of the year, those with negative revenue growth and net losses, the “number of stores opened”, the best-used story in the past, failed collectively for the first time. Overlord Chahime was only the first to use the dividend policy to answer this question positively.

Under the new pricing method, the company must prove one thing: the cash on the account is real and willing to distribute it to shareholders. Overlord Chahime had about 6.8 billion yuan in cash as of the end of June. This time, 370 million US dollars (about 2.6 billion yuan) was distributed, which is equivalent to 40% of the cash on the account (editor's estimate).

Actually, it was announced. At the second quarter results meeting, management said that the repurchase of 150 million US dollars has been completed, and the company “is considering shareholder return plans such as regular dividends”. It takes less than three months from “consideration” to “approval”.

Why is it worth it, other stores can't

Also in the face of stalling growth, why are some brands only able to close their stores, but Overlord Chahime is able to send money? The difference lies in the business model.

Overlord Chahime is mainly a franchisee. The store's rent, labor, and wear and tear are all paid by franchisees. The headquarters's revenue mainly comes from selling raw materials, packaging materials, and equipment to franchisees — essentially a business of “collecting rent from the person who opens the store.” The more stores opened, the more the headquarters recovered from droughts and floods; the store couldn't be opened, and the headquarters was still holding on to the cash it had saved over the years. The cruelty of the asset-light model is the externalization of risk: when the market is good, the headquarters earns the most stable profit, and when the market is bad, it is also the franchisees that take the pressure first.

Therefore, “being able to share” itself is a statement: the headquarters judges that its role as a cash cow can be maintained for a long time before they dare to promise cash. Conversely, even if an asset-heavy direct-run brand has money on its account, they must first cover the costs of hundreds of stores, and they can't share it if they want to.

Dividend promises also have an effect that is easily overlooked: locking in half of each year's profits into dividends means that the money that the headquarters can freely dispose of is cut in half — blindsided capital expenses, readily incubated side businesses, and expensive cross-border acquisitions will all be held back due to “no money.” For franchisees, this isn't necessarily a bad thing.

Calculate the account yourself: who took the big head

Founder Zhang Junjie holds 34.2% of the shares through the family trust. This time, he was able to share about 127 million US dollars, equivalent to about 900 million yuan.

What is the concept of 900 million? For the whole year of 2025, Bawang Chaji returned a net profit of 1,135 million yuan — roughly evenly distributed among the current 7,639 stores, each store contributed about 15,000 yuan in net profit a year to the headquarters (editor's estimate). The money Zhang Junjie has taken away alone this time is about equal to the profits that 6,000 stores make for the headquarters in a year.

The founder's one dividend is equal to about 80% of the company's net profit for one year.

Let's also look at the overall whereabouts of the money: the consumer's money to buy a cup of milk tea becomes the revenue and profit of the headquarters through the franchisee's purchase; the profit becomes 370 million US dollars in dividends; about one-third of this goes back to the founder's own pocket. It's not a distribution of benefits — dividends are distributed according to shareholding ratio, and the rules cannot be singled out — but it clearly answers “who is running this company now”: for shareholders taking cash, not for franchisees opening new stores.

The store is hot, the account is cold

It's actually not cold at the store side. J.P. Morgan Chase's November 12 research notes that in October, Overlord Chahime participated in the store's buy-one-one-free campaign, selling 40,000 to 50,000 yuan, about 2,000 to 2,500 cups; on the last day of the event, some store clerks posted “Can't finish, can't finish at all” on social platforms (according to the November 12 article on the official account “Xiaoqing is not a demon”). At noon on November 13, there was a final round of buy-one-get-one-free passwords.

The store is breaking orders, the company is splitting money, and the stock price is at the bottom — three things happened at the same time, which just means that the problem is not the product, but the question of “can you still make money by opening a store?” The enthusiasm on the product side can't save the thinning of the single-store model, so the company chose to put the cash it earns into the bag first rather than store the store first.

If you read these three things together, you can also read the fourth level: Sending money at the bottom is itself a reassurance pill for the market. Using real money to tell investors “the company doesn't need this money for emergency relief” works better than any phrase “steady operation” — the facts also proved effective, and stock prices bucked the trend on the night of the announcement.

A judgement that can be falsified

Judgment: Overlord Chahime is switching from “growth stocks” to “cash bulls,” and the priority of opening a store is giving way to dividends.

If established → you will see: the 2027 annual report delivers no less than 50% dividends; net growth in global stores continues to slow down; and the company no longer targets large-scale store openings. If not established → GMV of the same store resumes double-digit growth in the first half of 2027 and the company restarts aggressive store opening, then this dividend is only a one-time gesture during the trough period, and the judgment is that it will be abandoned.

Let's also leave a reminder: 50% is not a “commitment amount”, and the board of directors reserves room for “determination as appropriate in the light of capital expenditure” — so when verifying this judgment, it is not about how much was distributed in a given year, but rather whether the minimum limit was maintained for three consecutive years.

Next observation point: 2026 annual report around April 2027, and the number of third-party stores per month.

For milk tea drinkers, the short term is beneficial: the company needs traffic and word of mouth at the bottom of the stock price, and activities such as buy one get one free will continue. For those who want to join, they should think one more level: the headquarters prioritizes profits to shareholders rather than re-investment, and the support and concessions that new stores can get are less likely than in previous years.

Some people say that splitting the money when the business is done is the most honest approach for shareholders; others say that tea is far from reaching the ceiling, and that splitting money now is to confess defeat ahead of time. Which side are you on -- should Overlord Chahime split half of the profit, or should you use it to open a new store?

This article is reprinted from the WeChat account “New Consumer Trends”, Zhitong Finance Editor: Chen Yufeng.