Chagee Holdings Limited

AI-generated fair value estimate for this company.

Method: 10-year unlevered FCF DCF in USD (CNY converted at ~7.1 CNY/USD): $1,851M TTM revenue (13,143M CNY) growing 10%/yr in yrs 1-2, 8% yr3, 6% yr4, 5% yrs5-6, 4% yrs7-8, 3% yrs9-10 (analyst consensus ~10.4% FY26 and ~11.5% FY27 revenue growth, fading toward GDP-like growth); unlevered FCF margin ramping from 7% (yr1) to 10% (yr9-10), vs TTM actual FCF margin of 6.1% and FY2024 pre-expansion peak of 21%; 12% discount rate; 3% terminal growth; plus $927M net cash (6,582M CNY); divided by 190.76M ADS shares outstanding.

Reasoning: Chagee is a mature, profitable, cash-generative franchised tea retailer (FY2025 net income of 1,019M CNY, 11.3% TTM operating margin) now past its post-IPO hypergrowth phase, so a standard FCF DCF anchored to its large net cash balance and a conservative growth/margin fade is more appropriate than a pre-revenue approach, and the 12% discount rate and sharp growth deceleration reflect both the real same-store slowdown (TTM revenue growth of -3.4%) and an added China-ADR risk premium.