My most memorable trade choice in 2025 was CHA (Chagee). The stock surged significantly on its first trading day in mid-April, leaving a deep impression. I believe the management team is highly capable, having built the brand from a fifth-tier city in China to become one of the leading tea beverage brands within just seven years. Their focus on cultural outreach has enhanced the vitality and resonance of their tea products. Although I am confident about the company's future potential, I always adhere to the investment philosophy advocated by Graham: even excellent companies must be purchased at a fair price.
However, after its IPO, the stock price continued to decline until December, dropping approximately 75%, which was a substantial fall. Many people questioned CHA’s intentions for listing in the U.S., with some arguing that the company was merely deceiving retail investors and was nothing more than a bubble tea seller. However, I see it differently. In my view, the company seeks to convey the concept of 'Eastern Tea, Global Friendship.' Tea can serve as a cross-cultural communication bridge, similar to coffee, transcending national boundaries.
In comparison to other listed tea beverage companies such as Mixue Bingcheng, which has a price-to-earnings (P/E) ratio above 35, and other leading publicly traded tea beverage firms with average P/E ratios around 25+, CHA's P/E ratio stands at only 7 at its lowest point. Personally, I believe this represents a significantly undervalued company or reflects excessive market pessimism.
I opened my first position at $15.91, purchasing three shares. My plan was to enter the market initially and then add to my holdings later. For my second position, I bought 12 shares just before the company issued a one-time high dividend. Recently, due to concerns raised by local residents over media reports claiming that CHA's tea products contained excessively high caffeine levels, leading to insomnia and heart palpitations, the stock plummeted by 14% the following day. In my opinion, the market reaction was highly irrational. I believe these were isolated incidents. I am particularly fond of Buffett's famous quote: 'Be fearful when others are greedy, and be greedy when others are fearful.' Thus, I took advantage of the panic-driven selloff to open my third position, purchasing 20 shares—the largest single purchase I made. That night, there was significant buying interest, and the stock rebounded sharply, allowing me to start seeing profits today.