Citigroup: Sales of the "Emperor Tea Princess" in the fourth quarter may continue to be under pressure.

Citigroup analysts Wei Xiaopo and Vincent Young reported that the same-store sales of HeyTea in the fourth quarter may continue to be under pressure. These analysts mentioned that, due to its focus on the high-end market, HeyTea has not actively participated in the price wars currently taking place in China since the second quarter. This has resulted in a decline in quarterly sales compared to the previous quarter. As a result of weaker revenue expectations, they have lowered the adjusted net profit forecasts for the company in 2025, 2026, and 2027 by 19%, 22%, and 24% respectively. However, the special dividend of $0.92 per American Depositary Share distributed by HeyTea, as well as the company's continued efforts to improve cash returns to shareholders, came as a stronger surprise than expected to these analysts. Citigroup has lowered HeyTea's target price for American Depositary Shares from $29.50 to $24.60, but has maintained its buy/high-risk rating.