Green Tea Group (HKG: 06831) defied the broader industry slowdown in the first half of 2026, posting a 16.8% year-on-year jump in revenue to RMB 2.67 billion and a 16.9% rise in adjusted net profit to RMB 294 million. Notably, revenue from overseas markets (including Hong Kong, Macau, and Southeast Asia) surged 266.5% compared with the same period last year.

While the overall catering sector struggled with declining traffic and mounting cost pressures, Green Tea Group expanded its store network to 733 locations, with a particular acceleration in its offshore footprint that is emerging as a powerful secondary growth engine. This counter-cyclical outperformance is no accident—the company's continuous product innovation sustains its cross-regional appeal, while a two-tier warehouse network comprising nine regional distribution centers and 23 front-end hubs underpins its high-value-for-money strategy. In addition, AI technology now permeates everything from store operations to head-office management and site selection, enabling a shift from intuition-driven to data-driven scale expansion.

Amid the bleak industry outlook, official statistics indicate that nationwide restaurant revenues in the first half of 2026 reached RMB 2.8255 trillion, up just 2.8% year on year and 1.5 percentage points slower than the prior-year pace. Growth progressively decelerated during the period, with limited-service restaurant operators bearing the brunt of the slowdown, posting a mere 1.8% cumulative increase, below the industry average. In this environment of contraction and consolidation, smaller operators lacking scale efficiencies and operational precision are being squeezed out, while market leaders with robust supply chains, established brands, and superior management capabilities are well-positioned to recover first and pull ahead. Green Tea Group exemplifies this dynamic.

Beyond its robust revenue and profitability metrics, Green Tea Group's delivery business still accounts for a significantly lower share of total sales than the industry benchmark, indicating substantial headroom for growth in the second half of the year. This potential upside is expected to further support same-store sales increases. Underpinning this resilience is the company's relentless refinement of its new-store model and its disciplined focus on same-store operational durability. During the period, Green Tea Group opened 131 new restaurants, bringing the total to over 700 locations across more than 160 cities in mainland China. Having largely mitigated the risks associated with entering untested regions, the company's core strategy now centers on intensifying its presence in existing markets. As store density increases, logistics scale effects, district management optimization, and staffing efficiency gains are continuously unlocking cost-reduction opportunities—this densification represents not just quantitative expansion but a continuous evolution of the unit economics.

The new-store performance is a compelling testament to the robustness and replicability of Green Tea Group's single-store model. For shopping-mall locations opened in the first half of 2026, average monthly revenue per square meter reached RMB 1,868, a 47.3% improvement over stores opened before 2026. Breaking this down by city tier, first-tier new stores achieved RMB 1,795 per square meter per month, second-tier stores RMB 1,837, and third-tier and below RMB 2,028. The average cash payback period for new stores has also shortened to 12.5 months—a leading figure in the sector. These metrics reflect a standardized capability built on years of validation, covering everything from site evaluation and construction timelines to operational ramp-up, ensuring new outlets can quickly attain normal operating status and steady profitability.

While new-store efficiency and payback metrics highlight the "explosive power" of the single-store model, sustaining long-term growth of mature locations requires enduring "endurance." Green Tea Group's approach to same-store vitality draws on its deep-rooted supply-chain strengths, operational refinement, and a consistent pipeline of research-driven menu innovations. Rather than capitulating to industry headwinds, the company has held true to its founding mission of "helping more people enjoy a good meal with ease," doubling down on supply-chain optimization, store-model upgrades, digitalized operations, and continuous menu development. This accumulated expertise has enabled Green Tea Group to deliver robust earnings growth precisely when competitors are retrenching, carving out a wide moat encompassing supply chain, brand equity, and scale.

Innovation remains a defining facet of the brand's identity. Since opening its first restaurant by West Lake in Hangzhou in 2008, Green Tea Group has championed a fusion-menu concept centered on Zhejiang cuisine while dynamically adapting to regional tastes from East to North China and the Sichuan-Chongqing area. As a quintessential "fusion cuisine" player, it holds an inherent capacity for cross-regional and cross-cultural adaptation, with its R&D team maintaining a high cadence of market research and menu trials to stay attuned to seasonal shifts and consumer trends. In a market rife with price wars, Green Tea Group chooses to "compete on quality rather than price," consistently raising dish standards and ingredient quality while keeping average ticket sizes steady—a strategy that preserves healthy profit margins even in hyper-competitive conditions.

The supply-chain backbone consists of nine central warehouses and 23 front-end facilities (including those in Hong Kong and Macau), a two-tier system that differs from the industry-standard centralized-delivery model. The central hubs anchor the Pearl River Delta, Yangtze River Delta, Beijing-Tianjin-Hebei, Sichuan-Chongqing, and Central Plains economic zones, with front-end warehouses positioned closer to urban endpoints to shrink last-mile delivery radii, enabling next-day delivery to nearly all stores. This mature logistics framework sharply reduces inventory pressure while improving ingredient freshness and turnover efficiency—the bedrock of Green Tea Group's long-standing high-quality-value proposition. In terms of supplier strategy, the company deploys a "national champions + regional leaders + trusted legacy partners" matrix: national giants such as SF Cold Chain and Fresh Life provide trunk-line logistics with standardized service; regional leaders cover subnational distribution and final-mile flexibility; and legacy partners ensure smooth transitions in specific areas. This architecture avoids over-reliance on any single general contractor while preventing fragmentation-induced management complexity.

Simultaneously advancing its globalization drive, Green Tea Group opened its first Hong Kong outlet in September 2024, marking the formal commencement of its international journey. By mid-2026, the company operated 22 locations across Hong Kong, Macau, and several Southeast Asian nations, generating overseas revenue of RMB 163 million for the period—a 266.5% year-on-year surge. Significantly, profit margins at overseas outlets far outpace domestic ones, with average revenue and profit per store approximately three times higher than in mainland China, underscoring the commercial value and profit potential of the overseas expansion. For 2026, Green Tea Group plans to open at least 15 additional international outlets, primarily in high-potential markets such as Malaysia and Vietnam, with accompanying overseas profits expected to contribute around 20% of the group's incremental earnings for the year—one of its key profit growth drivers.

Overseas Chinese-restaurant markets remain vast yet fragmented, offering blue-ocean opportunities for brands with systematic competitive advantages. Industry observers widely concur that, given Green Tea Group's proven supply-chain capabilities, standardized operations, and distinctive Eastern aesthetic brand culture, the company is well positioned to transform its international business into the most important growth engine of the next decade. Meanwhile, AI technology is rewriting its efficiency trajectory across three fronts: store operations, head-office marketing, and site selection. Using computer vision, AI monitors service quality and SOP compliance in real time; predictive analytics based on big data optimize workforce scheduling and raw-material allocation, minimizing waste while refining menus and product development; and ROI-driven marketing tools enable tailored store-level campaigns as well as membership lifecycle management with churn-warning systems, unlocking member value at minimal cost. An enterprise-wide AI "brain" fed by unified data is moving decision-making from experience-based to data-based, while AI-assisted site evaluation matches the optimal store format to each location and manages the full lifecycle of each outlet—measurably elevating the success rate of expansion and providing scientific support for scaling operations. From a single modest restaurant by Hangzhou's West Lake to a leading mid-priced leisure dining brand spanning the nation and beyond, Green Tea Group is methodically forging its way onto the global stage.