At a recent annual general meeting for NAYUKI (HKG: 02150) shareholders, several investors who have sustained losses posed pointed questions to the company's management team.

One shareholder, reportedly having lost millions, questioned the company's relatively higher operational costs compared to other tea beverage chains and inquired about future improvement strategies.

Management explained that historically, all stores were company-operated and featured large floor areas, leading to higher rental and labor expenses. The strategy now involves downsizing store formats, with the transition expected to complete this year, alongside an expansion into overseas markets.

Another shareholder, also facing significant losses, asked whether the company had any plans for market capitalization management.

The management team stated there were no such plans but confirmed the company would allocate a portion of its funds for share buybacks.

Addressing concerns about the shift from freshly made to pre-made European-style bread, management clarified that post-pandemic consumer behavior has shifted predominantly to online ordering. Pre-made bread is used to ensure consistent taste and quality. They argued that reheating bread that had cooled in display cases would result in inferior flavor compared to the pre-made alternative. The company emphasized that its brand is built on health-conscious offerings, and it believes customers will continue to make repeat purchases despite this operational change.

The company did not provide a definitive response to the broader situation outlined by shareholders.

Public information shows NAYUKI went public in 2021 with an offer price of HK$19.8 per share. Its share price has since declined to below HK$1. Out of the five full fiscal years following its listing, the company reported losses in four and has not yet returned to profitability for the 2025 fiscal year.