Chagee Holdings Limited American Depositary Shares 2026 Q2 Earnings Call

Hello, everyone, and welcome to Chagee's second quarter 2026 earnings call. With us today are Mr. Junjie Zhang, our CEO, Mr. Dengfeng Yin, our COO, and Mr. Aaron Huang, our CFO. The company's financial and operating results were released by the newswire earlier today and are currently available online. Before we continue, I refer you to our Safe Harbor statement in the earnings press release, which applies to this call. Any forward-looking statements that we make on this call are based on assumptions as of today, and Chagee does not undertake any obligations to update these statements. Also, this call includes discussions of certain Non-GAAP financial measure. Please refer to our earnings release, which contains a reconciliation of Non-GAAP measure to GAAP measure. With that, I will turn the call to our CEO, Mr. Junjie Zhang. Please go ahead, sir. Hello.

Hello, everyone. Welcome to Chagee's second quarter 2026 earnings call. As we entered 2026, our strategy has stayed focused on the fundamentals of the business, centered on doing well by the things our consumers truly care about. In the first quarter, we completed a systematic review of our organization, product, and marketing roadmap, laying the foundation for high-quality growth. While the external environment saw some volatility in the second quarter, these changes have only reinforced our conviction. The ability to navigate cycles ultimately comes down to genuine consumer recognition. The more complex the market, the more important it is to return to the fundamentals. The more intense the competition, the more important it is to perfect every consumer touch point. All of our work in the second quarter was built around this logic, not as reactive response, but as a more focused commitment to our proven path.

The tea beverage industry is going through a structural change. On the supply side, the fresh milk tea category is now crowded with more players, and a competitive landscape has shifted from shared growth in an expanding market to competition over a fixed space, raising the intensity of competition. On the demand side, shifting generational value require brands to find new ways of telling their story. The old playbook, built on high-profile positioning and loud marketing, has lost its effectiveness. What consumers are looking for today is individual self-expression and a genuine sense of comfort. Brands need to become a gentle touch point that resonates with the individual, connecting through sincerity and responding to consumers with care. On the channel side, intensified competition among delivery platforms is reshaping consumer behavior.

The public domain has expanded meaningfully and become a key competitive arena for brands. Meanwhile, traffic distribution has become increasingly diversified and fragmented. Brands must closely track where consumers are moving and allocate resources efficiently.

面对这些变化，我们主要从四个维度在构建我们的能力。第一，提升核心的能力。在前台，我们将强化创新能力，向优而行，也向新而行，充分释放品牌与产业的创造力。那中台呢，我们也在夯实我们的支撑能力。仅靠创新肯定是不够的，还需要强大的组织能力，调动更多的资源来实现目标。所以我们持续提升运营体系的能力、渠道的能力、用户运营和IT基础设施的能力，以支撑日益扩大的规模体量。 In response to these changes, we are building our capabilities across four dimensions.

First, strengthening our core capabilities. At the front end, we are enhancing our innovation capabilities, striving for excellence, embracing new directions, and fully unlocking the creativity of our branding and product teams. In the middle office, we are reinforcing our support infrastructure. Innovation alone is not enough. We also need strong capabilities to mobilize resources and deliver our goals. We are therefore continuing to upgrading our operating system, channel capabilities, consumer operations, and IT infrastructure to support our growing scale.

第二，调整产品的结构。我们在原叶鲜奶茶之外，积极在探索更多的品类。比如二季度大家看到山心的茶特调品类、Geelato品类的。那我们也希望可以通过更多尝试，更多产品的品类形态，以满足用户日益多元的需求。这要求我们持续改革，无论在供应链的能力还是运营体系的能力，都要为品类扩张提供更坚实的支撑。 Second, broadening our product mix.

Beyond Original Leaf Fresh Milk Tea, we are actively exploring additional categories, including the special deals and Geelato recently launched in the second quarter. We want to test more product formats to meet our consumers' increasingly diverse needs. This requires us to continue reforming our supply chain capabilities and operating system to provide a solid foundation for category expansion.

第三，增强用户触达。一方面通过灵活多元的内容营销来打动用户，扩大我们的流量入口。另一方面，通过多场景的渗透来扩展、扩宽我们用户的触达面。 Third, enhancing consumer reach.

On one hand, we are using flexible and diverse content marketing to connect with consumers and expand our traffic funnel. On the other hand, we are expanding our reach through penetration across more consumer scenarios.

第四是迭代价值主张。随着用户需求的变化，我们品牌的价值主张也需要顺应时代进行更迭升级。通过价值共鸣和体验的沉淀，将用户真正留下来，这是根本。 Fourth, we're evolving our value proposition.

As consumer needs evolve, our brand value proposition also needs to iterate with the times. Through emotional resonance and experience-driven retention, we aim to turn new consumers into loyal, long-term Chagee friends.

以茶会友是我们始终不变的价值观。把茶做到极致，把霸王茶姬推向全球，塑造高价值品牌与良好的用户体验，这是我们始终如一的方向和标准。为了这一标准，我们持续构建的能力，每一步都坚定且踏实。我们相信，越是在复杂的环境中，我们越要回归本质，做好产品，服务好用户，打磨好每一家门店。随着我们在产品创新、营销创新、组织效率、用户运营和海外拓展等多方面的持续深耕，我们有信心在任何市场的环境下都实现高质量可持续的增长。 Connecting through tea is our enduring value.