Auntea Jenny Brews Record Profits on Small-City Bet Amid Market Headwinds

HONG KONG – March 25, 2026 – Auntea Jenny (Shanghai) Industrial Co., Ltd. (2589.HK) today announced a stellar set of annual results for 2025, revealing significant double-digit growth that saw its profit surge by over 52%. The freshly-made beverage company reported revenues of RMB 4.47 billion, a 36% increase year-over-year, and officially crossed the milestone of 10,000 stores, ending the year with 11,449 locations.

While the headline numbers paint a picture of robust health, they also underscore a strategic gamble that is paying off for the beverage giant: a deep and aggressive push into China's often-overlooked lower-tier cities. As the company navigates an increasingly saturated domestic market and takes its first steps onto the global stage, its success hinges on whether this strategy can be sustained.

The Untapped Goldmine in China's Heartland

The engine of Auntea Jenny's impressive growth is not in the bustling metropolises of Beijing or Shanghai, but in the country's smaller cities and towns. The company's 2025 report highlights that 52.7% of its stores are now located in third-tier and smaller cities, a 2.3 percentage point increase from the previous year. This deliberate focus has allowed the brand to tap into a resilient and rapidly growing consumer base.

While China's Tier-1 cities face economic headwinds, consumption in many Tier-3 and Tier-4 cities grew by 3-5% in 2024. With an estimated 70% of China's next 80 million middle-class consumers expected to come from these regions by 2030, Auntea Jenny has positioned itself as a market leader in what it calls the "largest and fastest-growing segment" of the freshly-made tea market. This strategy allows the company to capture long-term growth potential, leveraging a vast store network in areas where global giants are only just beginning to make inroads.

More Than Just Tea: A Recipe for Diversification

To capture this diverse market, Auntea Jenny is proving it is more than just a traditional tea shop. The company is aggressively diversifying its offerings under a multi-brand strategy. Alongside its flagship Auntea Jenny brand, which focuses on health-conscious innovations like the Kale Series fruit and vegetable teas, the company is cultivating Fallstea and Jenny x Coffee.

Fallstea targets the value-conscious consumer with a simple promise of "Real Tea, Real Milk" at affordable prices. Meanwhile, the push into coffee, complete with upgraded equipment and beans, represents a strategic move to broaden consumption scenarios and compete for a different part of the day. This product innovation is relentless, with the company launching a total of 213 new products in 2025 alone, guided by a "Daily Health+" concept. This portfolio approach allows Auntea Jenny to penetrate different market segments with flexible pricing and a wide array of products, from nourishing fruit teas to classic milk teas and now, coffee.

The Franchise Formula: Engine for Growth, Source of Risk

The vehicle for this rapid expansion is a franchise-focused business model. This system has enabled Auntea Jenny to scale its presence across 300 cities at a blistering pace. However, this rapid growth is not without its challenges. While the company praises its "mutually beneficial franchise system," the speed of expansion has raised questions about operational control and quality consistency.

Industry data suggests Auntea Jenny has faced a significant number of customer complaints on consumer platforms, which can be an indicator of franchisee management issues. Reports from earlier in 2024 noted that the company's complaint volume was high relative to its store count when compared to some rivals, sometimes pointing to insufficient training and supervision. Maintaining brand standards across a network of over 11,000 independent operators is a monumental task, and one that becomes exponentially more complex as the company begins its international journey.

A Global Thirst and a Crowded Home Market

Despite its strong performance, Auntea Jenny operates in a fiercely competitive environment. The Chinese freshly-made tea market, while large, is seeing its growth rate slow, projected to fall from 44% in 2023 to just 12.4% in 2025. The landscape is dominated by giants like Mixue Ice Cream & Tea, which boasts over 36,000 outlets, and fierce rivals like Guming and CHAGEE, all vying for market share. The cautionary tale of Chabaidao's stock plummeting after its 2024 IPO serves as a stark reminder of market volatility.

This domestic pressure is likely a key driver behind Auntea Jenny's recent international foray. In 2025, the company opened 45 stores overseas in markets including the United States, South Korea, and Malaysia. While a small first step, it signals a new chapter of ambition. To support this dual-front expansion, the company is heavily investing in digitalizing its supply chain, establishing direct sourcing models, and expanding its network of warehouses and cold-chain facilities to ensure efficiency and quality control.

Investor sentiment remains mixed. The company's 2025 IPO was a stunning success, with shares soaring on debut. However, the stock has since declined from those highs, reflecting broader market concerns about the sector's long-term valuation. While analysts hold a "Strong Buy" rating with a significant price target upside, the path ahead requires Auntea Jenny to expertly balance its aggressive expansion with the critical need for operational excellence, both in China's heartland and across the globe.