Starbucks CEO Brian Niccol signaled the coffee giant's China business is worth more than previously thought, CNBC's Jim Cramer said Thursday. After interviewing Niccol for Wednesday evening's " Mad Money, " Cramer said the CEO wrote to say: "We expect the value of the China business to Starbucks to be north of $10 billion. That includes the upfront investment by a potential partner, Starbucks' retained stake in the China business, and future royalty payments." Cramer read this statement on Thursday morning's " Squawk on the Street ." Starbucks stock rose nearly 2% on the session. Back in July, it was reported that Starbucks China had attracted offers for a potential stake sale, valuing the coffee chain's China business at up to $10 billion. Starbucks does not intend to sell the China business entirely — but instead, it is looking for a partner to help navigate increasing local competition from Chinese rivals, such as Luckin Coffee . According to the Financial Times , five private equity groups submitted offers last week. The FT also reported in its Wednesday night story that U.S.-based Carlyle and Chinese-owned Boyu Capital were the leading contenders. During Thursday's Morning Meeting for members of the CNBC Investing Club , Cramer said Niccol's estimate of north of $10 billion is a "major step function higher." He added, "That means China, which was supposed to be a black hole — that was the big short story [betting against the stock] — is going to be able to produce something good for them." SBUX YTD mountain Starbucks YTD What to do with China has been a big question surrounding Niccol's turnaround plan for Starbucks just over one year into his tenure as CEO. Niccol came to Starbucks from Chipotle , where he engineered a successful overhaul of that brand and spectacular stock returns. Wall Street had high hopes for Niccol when he was announced as the new CEO of Starbucks. However, the coffee giant's problems have proved difficult to fix quickly. Cramer has repeatedly said he stands by Niccol, arguing Thursday that the CEO's aggressive strategy of shuttering low-performing coffeehouse locations and opening and putting resources behind winners is "going to produce a higher comp store sales number." This reversal of deteriorating sales "could bring the stock up dramatically," Cramer added. "If you don't own it, I would buy some Starbucks," Cramer concluded. (Jim Cramer's Charitable Trust is long SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
