Citi has rated the Chinese premium tea chain Chagee as promising, seeing a price potential of 44 percent. This assessment is based on Chagee’s efficient franchise model and planned expansion into the USA, which could be particularly interesting for investors.
Background and Market Position
Chagee has established itself as a leading provider in the growing market for freshly brewed premium tea in China. By the end of March 2025, the company operated 6,681 tea houses, marking a 63.6 percent increase compared to the previous year. Chagee holds approximately twenty percent market share in China’s premium segment, underscoring its strong competitive position.
Analyst Assessments
Citi expert Xiaopo Wei has rated Chagee’s stock as “Buy” and set a target price of 43.70 USD. This represents an upside potential of about 44 percent compared to the last closing price. Despite a decline of over ten percent since its stock market debut in April, Chagee has experienced a rebound due to strong figures in the first quarter.
Expansion into the USA
Chagee’s planned expansion into the USA is another factor that attracts investor interest. This strategic decision could help Chagee strengthen its global presence and tap into new markets.
Comparison with Starbucks
The comparison with Starbucks is not coincidental, as both companies operate in the beverage chain sector. While Starbucks is an established brand in the coffee sector, Chagee positions itself as a leading provider in the premium tea segment in Asia. Chagee’s expansion into the USA could adopt similar success strategies as those of Starbucks to gain a broader customer base.
Conclusion
Chagee offers an attractive investment opportunity with its efficient franchise model and planned expansion into the USA. The positive assessment by Citi and significant price potential make Chagee an interesting candidate for investors looking to invest in the growing premium tea market.