CHA · Chagee Holdings
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $10.30
Note written ·
How this view changed
- · Rating raised from Low to Medium. The note's kill line was crossed, 13 November 2026: On 13 November 2026 the shares closed at $14.37, above the $14.00 line published on 13 November 2026, their first completed close through it.
Price against the kill line
39.5% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $10.30, set on 15 November 2026, after the last close drawn. The shares are up 41.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $10.30, under the $12.33 close of 11 November 2026 even after the $1.95 dividend leaves the price around the 23 November 2026 record date, which would show the dividend rally fully reversed; or third-quarter Greater China same-store GMV falling more than the second quarter's 16.1%.
Research onlyNot in the portfolio.
The business · as of
Chagee sells freshly made tea drinks through branded teahouses, mostly franchised, in China and a growing number overseas, earning from goods and equipment sold to franchisees, franchise fees and company-run stores. Net revenues were RMB3,414.6 million in the second quarter of 2026, according to its 28 August 2026 results.
What is changing, and what follows · as of
- What is changing now
- On 12 November 2026 the board declared a special dividend of about $1.95 per ADS, payable on or about 4 December 2026, and a policy to pay at least 50% of prior-year net income for 2027 to 2029, per its 6-K.
- What follows for the company
- The payment draws on cash, restricted cash and time deposits of RMB6,795.5 million at 30 June 2026, already down from RMB7,892.4 million at 31 December 2025, alongside a $150 million buyback.
- What follows for its customers, suppliers and competitors
- No customer, supplier or competitor named in Chagee's filings or dated news is affected by the dividend; the sales test for its China tea business comes with third-quarter results.
What the price assumes · as of
No filed valuation multiples are available because Chagee files as a foreign issuer; at the 13 November 2026 close of $14.37 the price rests on second-quarter 2026 net revenues of RMB3,414.6 million, up 2.5%, and operating income of RMB524.7 million, and holds only if profit stays near that level while China same-store GMV stops falling 16.1% a year.
Key figures from the filings · Consumer Discretionary
Filed figures are not available: no quarterly report in US GAAP with the SEC (a foreign filer reports on Form 20-F or 40-F).
All filed numbers
What Chagee Holdings reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): the share of shares outstanding is not available, 2.5 days of average trading to cover, −9.7% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $0 |
The thesis
Chagee Holdings is now modestly more likely to lead the S&P 500 over the next three months. The shares broke above the level that tested the earlier lag call, and the $1.95 special dividend is a cash return that counts in total return. The third-quarter report, expected around 27 November 2026 by market calendars, shows whether China same-store sales have stopped falling fast enough to hold the gain.
The $14.00 kill line was crossed on 13 November 2026, when the shares closed at $14.37. That close showed the lag call wrong on its own test: the shares rose 6.4% in the session after the 12 November 2026 dividend announcement had already lifted them from $12.33 to $13.51. The rating is Medium because buyers have paid up for the cash return while the business still shrank in the latest reported quarter.
That weakness is still on the record. Chagee's 28 August 2026 results showed Greater China same-store gross merchandise value (GMV, the value of drinks sold through its teahouses) down 16.1% from a year earlier. Average monthly GMV per Greater China teahouse fell to RMB338,259 from RMB356,080 in the first quarter. The third-quarter figures decide whether the rally holds once the dividend leaves the price.
Bullish and bearish views on Chagee Holdings Limited
The bull case on Chagee Holdings Limited (CHA), in brief: shares lead into the dividend. The bear case: China same-store GMV still falling.
Bull case
- Shares lead into the dividend. The shares closed at $14.37 on 13 November 2026, up from $12.33 on 11 November 2026, and the 3-month change on adjusted closes is 41.6%. Both closes sit above the 50-day moving average of $12.12 and the 200-day of $11.17 as of 13 November 2026.
- Large cash return, then a policy. The board declared a special dividend of about $1.95 per American depositary share (ADS) on 12 November 2026, payable on or about 4 December 2026. It also set a policy to pay at least 50% of the prior year's net income each year for three financial years, starting with the year ending 31 December 2027, according to the company's 6-K.
- Profit rebuilt despite flat sales. Second-quarter 2026 operating income was RMB524.7 million, up 387.6% from a year earlier, on net revenues of RMB3,414.6 million, up 2.5%, according to the 28 August 2026 results.
- Overseas growth is fast. Overseas GMV was RMB504.0 million in the second quarter of 2026, up 114.3% from a year earlier, across 399 overseas teahouses at 30 June 2026.
- Analyst support after the last report. Jefferies raised the shares to Buy from Hold on 21 October 2026 and lifted its target to $14.90 from $11.80.
Bear case
- China same-store GMV still falling. Greater China same-store GMV fell 16.1% from a year earlier in the second quarter of 2026. Greater China GMV was RMB7,156.3 million against RMB7,867.9 million a year earlier.
- Members and per-store sales slipped. Active members fell to 47.1 million in the second quarter of 2026 from 50.0 million in the first. Monthly GMV per Greater China teahouse fell to RMB338,259 from RMB404,352 a year earlier.
- Adjusted profit fell. Non-GAAP net income was RMB488.7 million in the second quarter of 2026 against RMB629.8 million a year earlier, according to the 28 August 2026 results.
- Cash is being paid out. Cash, restricted cash and time deposits were RMB6,795.5 million at 30 June 2026, down from RMB7,892.4 million at 31 December 2025, before the special dividend is paid.
- Dividend buyers may not stay. A common market view is that buyers who come in for a special dividend leave once it is paid. The rally from 11 November to 13 November 2026 came entirely in the two sessions after the announcement.
Price setup
The $14.00 kill line was crossed on 13 November 2026, when the shares closed at $14.37. The shares had closed between $12.33 and $12.57 from 6 November to 11 November 2026 before the dividend news. The 3-month change is 41.6% on adjusted closes, from a reference close of $10.15 on 17 August 2026.
On adjusted daily closes, the shares sit above the 50-day moving average of $12.12 and the 200-day moving average of $11.17 as of 13 November 2026. The 52-week intraday high is $16.56 on 2 December 2025, and the last close is 13.2% below it. The 52-week closing low is $9.16 on 1 April 2026.
The dividend changes how the chart reads from the 23 November 2026 record date. The quoted price should fall by about the $1.95 payment when the shares go ex-dividend. Adjusted closes will scale earlier prices down by the same payment, so the comparison with the index stays on a total-return basis. A quoted close after that date is not comparable with the $14.37 close of 13 November 2026.
Catalysts ahead
- 23 November 2026: Record date for the $1.95 special dividend. The payment leaves the quoted price when the shares go ex-dividend; whether they hold above the 11 November 2026 close of $12.33 net of the payment shows if buying outlasts the dividend.
- ~27 November 2026 (est.): Third-quarter 2026 results (date estimated by market calendars, not yet confirmed by the company). Shows whether Greater China same-store GMV and per-store sales recovered from the second quarter's 16.1% decline, which decides whether the November rally holds.
- ~4 December 2026 (est.): Payment of the $1.95 special dividend. Reduces the cash balance, RMB6,795.5 million at 30 June 2026, left for the buyback and overseas expansion.
What would change the view
A daily close below $10.30, under the $12.33 close of 11 November 2026 even after the $1.95 dividend leaves the price around the 23 November 2026 record date, which would show the dividend rally fully reversed; or third-quarter Greater China same-store GMV falling more than the second quarter's 16.1%.
The line before it, a daily close above $14.00 set on 13 November 2026, was crossed on 13 November 2026: the shares closed at $14.37.
The risks this note tracks, each with what would confirm it:
- China same-store sales keep falling at the second-quarter pace or faster, undercutting the price after the dividend is paid. Confirmed by: third-quarter Greater China same-store GMV down more than 16.1% from a year earlier, or monthly GMV per teahouse below the second quarter's RMB338,259.
- Dividend-driven buyers leave once the payment is captured. Confirmed by: adjusted closes falling back below the 50-day moving average after the 23 November 2026 record date.
- Profit recovery stalls as sales shrink. Confirmed by: third-quarter operating income falling from the second quarter's RMB524.7 million, or non-GAAP net income below a year earlier again.
- Overseas growth slows before it is large enough to offset China. Confirmed by: third-quarter overseas GMV growth well below the second quarter's 114.3%, with overseas same-store GMV still negative.
- Cash returns drain the balance sheet faster than earnings rebuild it. Confirmed by: cash, restricted cash and time deposits at 30 September 2026 falling further from RMB6,795.5 million at 30 June 2026 before the dividend payment.
What it trades with
Chagee earns most of its GMV in Greater China: RMB7,156.3 million of RMB7,660.3 million in the second quarter of 2026. The shares therefore move with China consumer spending and with other US-listed Chinese consumer stocks more than with the S&P 500. Results are reported in renminbi, so the dollar price of the ADS also moves with the exchange rate. The record date on 23 November 2026, the expected third-quarter report around 27 November 2026 and the payment around 4 December 2026 fall within two weeks, so price moves in that window mix the dividend adjustment with the reaction to results.
Caveats
- Each American depositary share represents one Class A ordinary share; the company also has Class B ordinary shares. Annual report on Form 20-F for 2025 · as of
- Chagee reports its results in renminbi while the ADS trades in US dollars on Nasdaq, so currency moves change the dollar value of reported figures. Chagee second-quarter 2026 results, Form 6-K · as of
- Dividends paid to ADS holders pass through the depositary and are subject to the deposit agreement's fees and expenses. Chagee Form 6-K, 12 November 2026 · as of
- As a foreign private issuer, Chagee reports quarterly results on Form 6-K and files an annual report on Form 20-F, not 10-Q and 10-K reports. Annual report on Form 20-F for 2025 · as of
The evidence, claim by claim (8)
- Board declared a special cash dividend of about $1.95 per ADS, payable on or about 4 December 2026 to holders of record at the close on 23 November 2026. Chagee Form 6-K, 12 November 2026 · as of
- Board adopted a policy to pay annual dividends of no less than 50% of the preceding year's net income for three financial years, starting with the year ending 31 December 2027. Chagee Form 6-K, 12 November 2026 · as of
- Greater China same-store GMV fell 16.1% from a year earlier in the second quarter of 2026; overseas same-store GMV fell 15.1%. Chagee second-quarter 2026 results, Form 6-K · as of
- Second-quarter 2026 net revenues were RMB3,414.6 million, up 2.5% from a year earlier; operating income was RMB524.7 million, up 387.6%. Chagee second-quarter 2026 results, Form 6-K · as of
- Second-quarter 2026 non-GAAP net income was RMB488.7 million, against RMB629.8 million a year earlier. Chagee second-quarter 2026 results, Form 6-K · as of
- Overseas GMV was RMB504.0 million in the second quarter of 2026, up 114.3% from a year earlier, with 399 overseas teahouses at 30 June 2026. Chagee second-quarter 2026 results, Form 6-K · as of
- Cash, restricted cash and time deposits were RMB6,795.5 million at 30 June 2026, down from RMB7,892.4 million at 31 December 2025. Chagee second-quarter 2026 results, Form 6-K · as of
- Jefferies upgraded Chagee to Buy from Hold and raised its price target to $14.90 from $11.80. Jefferies rating change reported by Benzinga, 21 October 2026 · as of
Sources
- SEC EDGAR ·
- SEC EDGAR ·
- Chagee (NASDAQ:CHA) Stock Jumps 4.7% Following Dividend Announcement · marketbeat.com ·
- Chagee Holdings Limited (CHA) · stockanalysis.com
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