Chagee Holdings (NASDAQ: $CHA) owns, operates, and franchises teahouses under the CHAGEE brand name. Its focus is the sale of fresh, handcrafted tea from premium tea leaves and fresh milk. Today, it has over 7,000 teahouses worldwide, including Southeast Asia and the US. On Friday, November 28, 2025, it released its Q3 fiscal 2025 results to a positive market reaction. Let us deep dive into those results.
Chagee Holdings Q3 Results
For the third quarter, total net revenue came in at RMB3,208.3 million (US$450.7 million), a 9.4% YoY decline, and a 3.7% decline sequentially. It reported a total Gross Merchandise Volume (GMV) of RMB7,929.5 million. The company reported a 75.3% YoY increase in total GMV generated in the overseas market to RMB300.3 million.
The company reported a non-GAAP net income of RMB502.8 million, with a non-GAAP net margin of 15.7%. Its global teahouse network now stands at 7,338 stores, with 300 teahouses added in the third quarter. Overseas, it added 54 new teahouses, including entry into Vietnam and the Philippines.
Other Q3 Highlights
The company reported it had a total of 222 million registered members at the end of the quarter, a 36.7% YoY increase. Its store close rate stands at 0.3% for the three consecutive quarters of fiscal 2025. Chagee Holdings reported gross profits of RMB1,726.5 million, with a gross margin of 53.8%. The company’s operating income came in at RMB454.4 million, for an operating margin of 14.2%.
It ended Q3 with RMB9,142 million (US$1,284.2 million) in Cash and Cash Equivalents, a massive increase from the RMB4,868.7 million reported last year. Chagee Holdings announced a special cash dividend of US$0.92 per ordinary share or ADS, with a total payout of around US$77 million.
Market Performance
Following the release of its Q3 results, $CHA shares rose 6.09% at the close of trading on November 28 at 1:00:02 PM in New York to $14.99. Year to date, the stock has dipped 55.59%, while over the past month, the stock price has fallen 12.49%.
According to a pair of Wall Street analysts, CHA shares are a strong buy. The analysts forecast an average price of $16.60, which is a 10.74% upside. They forecast a wide range of price targets, with a high of $19 and a low of $14.20.
Is Chagee Holdings A Buy (CHA)?
Chagee Holdings (CHA) Q3 results are a mixed bag. It reported a revenue decline. However, its gross margin of 47.41% is impressive and signals efficiency in cost management. Its net margin of 15.26% highlights its ability to remain profitable despite a revenue decline.
Its valuation also signals that Chagee could potentially be undervalued. It has a Trailing P/E ratio of 18.86, a Price/sales ratio of 1.37, and a Price/book 2.34. All these metrics are close to their 1-year lows, which is a good indicator for potential investors. As such, adding CHA shares to your portfolio could potentially be profitable in the medium term.
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