IPO Foresight | Breaking through competition in the Red Sea, Dongpeng Drinks invades the Hong Kong Stock Exchange to raise capital and increase overseas business

Following the failure of the first submission, Dongpeng Drinks (Group) Co., Ltd. (“Dongpeng Drink”), a leading energy drink company, quickly submitted the Hong Kong Stock Exchange twice, and its determination can be seen. 605499.SH

At a time when the internationalization process of Chinese brands is entering a critical period of development, Dongpeng Drinks is a benchmark enterprise in the Chinese consumer goods sector. Its current IPO process is not only about its own development financing, but is also viewed by the market as an important window for observing how local Chinese brands can use the international capital market to achieve a global strategic layout, so it has received widespread attention from investors and research institutes.

The diversification strategy has achieved remarkable results

As a leading energy drink company in China, the company has shown outstanding performance in terms of revenue growth. According to the prospectus, it ranks first among the top 20 listed soft drink companies in the world. According to Frost & Sullivan's report, in terms of sales volume, Dongpeng Drinks has ranked first in the Chinese energy drink market for four consecutive years since 2021, increasing its market share from 15.0% in 2021 to 26.3% in 2024; in terms of retail sales, the company ranked second in the industry in 2024, with a market share of 23.0%, and its position in the industry continued to strengthen.

After more than 30 years of development, Dongpeng Drinks has established a national beverage product matrix with the “Dongpeng” brand as the core, and is committed to providing consumers with delicious, high-quality and cost-effective beverage products. While consolidating the main energy drink business, the company also continues to promote product innovation and diversified category layout.

Looking at the breakdown, the company's products cover various categories such as energy drinks, sports drinks, tea drinks, coffee drinks, vegetable protein drinks, and fruit and vegetable juice drinks.

Among them, the sports drink sector is the company's fastest growing product in recent years. The Zhitong Finance App learned that the company launched the “Dongpeng Hydration” product in January 2023. The product focuses on sweating and hydration scenarios, and uses the “quick electrolyte replenishment” function. In 2024, the product recorded revenue of nearly 1.5 billion yuan, an increase of 280.4% over the previous year. Against this backdrop, the company's share of sports drink revenue has also increased year after year, from 3.5% in 2023 to 9.4% in 2024, and further increased to 13.9% in the first half of 2025. It can be seen that this product has become the company's “second growth curve”.

At the same time, other beverage products, including tea drinks, coffee drinks, plant-based protein drinks, and fruit and vegetable juice drinks, also achieved a steady increase in revenue. The reporting period achieved revenue of $280 million, $500 million, $1.02 billion and $880 million respectively, accounting for 3.3%, 4.5%, 6.5% and 8.2% of revenue respectively.

With the rapid increase in revenue from sports drinks and other beverage products, the share of revenue of energy drinks represented by “Dongpeng Special Drink” declined. From 2022 to 2024, it was 96.6%, 91.9%, and 84%, respectively, and declined further to 77.9% in the first half of 2025. However, it is still the main product that accounts for the largest share of the company's revenue. During the reporting period, revenue from this product continued to grow, from 8.21 billion yuan in 2022 to 13.3 billion yuan in 2024, with a compound annual growth rate of 27.3% during the period. At the same time, the product's gross margin performance also showed a steady upward trend, growing from 42.5% in 2022 to 47.5% in 2024, and further increasing to 49.9% in the first half of 2025.

This also led to an increase in the company's overall profitability. During the period, the company's gross margins were 41.5%, 42.3%, 44.1%, and 44.4%, respectively. Net profit for the same period was $1.44 billion, $2.04 billion, $3.33 billion and $2.37 billion respectively, with a compound annual growth rate of 52.0% from 2022 to 2024.

The industry circuit has broad space

According to the Zhitong Finance App, the rapid growth in Dongpeng Beverage's performance is inseparable from the continuous acceleration of industry demand.

Driven by factors such as the increase in per capita disposable income of residents, expansion of categories, refinement of sales channels, and increased consumer health awareness, the soft drink market in China continues to grow. According to Frost & Sullivan's report, retail sales in China's soft drink industry reached about 1.3 trillion yuan in 2024, making it the second largest soft drink consumer market in the world.

As the pace of life accelerates and consumers' awareness of health increases, people's demand for beverage products with specific functions such as energy supplementation and nutritional supplements continues to grow. Up to now, energy drinks have become the fastest growing sector. The compound annual growth rate of the market size from 2019 to 2024 reached 8.3%, higher than the 4.7% overall soft drink market during the same period. According to the Frost & Sullivan report, in terms of retail sales, the size of China's energy drink industry is expected to reach 1807 billion yuan in 2029, with a compound annual growth rate of 10.3% from 2025 to 2029.

Energy drinks, on the other hand, are the largest segment of the functional drink industry in China. In 2024, retail sales of 111.4 billion yuan account for 66.9% of the total retail sales market for functional drinks, and are expected to grow at a compound annual growth rate of 10.3% to RMB 18.7 billion in 2029.

Meanwhile, the sports drink sector, which the company has been developing in recent years, is the fastest growing segment in the Chinese energy drink industry. In 2024, the sports drink market accounted for 32.8% of the total retail sales of the energy drink market with 54.7 billion yuan in retail sales, and is expected to grow to 99.7 billion yuan in 2029 at a compound annual growth rate of 12.2%.

In terms of market position, according to Frost & Sullivan's report, Dongpeng Drinks has maintained the leading sales position in the Chinese energy drink industry for four consecutive years since 2021. In terms of 2024 sales volume, its market share is 40.1%. From 2022 to 2024, the company is also the fastest growing company in sales among the top five energy drink companies in China, with a compound annual growth rate of 28.5%.

Is going public in Hong Kong as “going overseas”?

In order to further expand the market, Dongpeng Drinks has set its sights overseas.

The Zhitong Finance App learned that in order to deepen its international layout, Dongpeng Drinks is systematically promoting its production capacity and channel construction in the Southeast Asian market. In November 2024, the company invested 1.2 billion yuan to build a production base in Hainan to better cover the sales needs of Hainan and the future Southeast Asian market; in December of the same year, it set up a subsidiary in Indonesia to cover Indonesia and surrounding regions. This series of initiatives, from trade exports to localized operations, marks that its strategy to enter the Southeast Asian market has reached a substantial stage. According to market data, the energy drink market size of the top six Southeast Asian economies is about 2.5 billion US dollars, and the compound growth rate has remained at 6% in recent years. Among them, the Indonesian market pattern is relatively scattered, while Dongpeng Specialty Drinks has a certain price advantage in markets such as Thailand. These factors all provide potential opportunities for it to expand overseas.

However, with the Hong Kong stock listing, global expansion is one of the company's main purposes. According to the prospectus, in order to meet the rapid growth needs of key markets such as Southeast Asia, Dongpeng Drinks expects to use the capital raised to gradually establish supply chain infrastructure, including warehousing, and eventually achieve localized operations. At the same time, the company will also carefully evaluate the possibility of extending to the upstream industrial chain and systematically support the long-term development of overseas business by deepening partnerships and promoting localized procurement of raw materials.

However, Dongpeng Drinks still faces many challenges on its way to overseas. The first is the brand perception barrier. In the energy drink market, international brands such as Red Bull and Monster have taken over consumers' minds, and Dongpeng Drinks, as a latecomer, needs to invest a lot of resources to establish awareness. Some analysts point out that Dongpeng Beverage needs to rely on cost performance and channel advantages to gain space in a market dominated by Red Bull.

Second, local adaptation is another key issue. Southeast Asian consumers prefer sweetness and small packaging. Dongpeng currently has large 500ml bottles and formulations that need to be adjusted in a targeted manner. At the same time, there is uncertainty about the policy and business environment. Strict entry restrictions on foreign investment and stricter environmental regulations such as Indonesia will increase the complexity and cost of their localized operations.

Channel construction is also a serious challenge. Compared to a mature domestic distribution network, Dongpeng lacks a ready-made system overseas, and needs to invest a lot of money to build its own channels or find local partners. Difficulties and risks coexist. Currently, it still accounts for less than 0.3% of overseas revenue, and its contribution to performance is limited in the short term, which is more reflected in the value of a strategic card.

Taken together, Dongpeng Beverage's current Hong Kong stock IPO shows its strategic intention to deepen the internationalization of capital. Judging from market performance, the company has a stable leading position in the field of functional drinks in China. Through the continuous growth of “Dongpeng Special Drink” products and the successful cultivation of new products such as “Dongpeng Hydration”, it has formed a more balanced business structure. At the same time, the nationwide sales network and digital operation system established by the company provide support for its continuous development.

However, this listing in Hong Kong not only provides momentum for local business upgrades, but is also a litmus test for its global strategy. Although the Southeast Asian market has considerable potential, systematic projects such as brand building and channel building require long-term investment and patience. Capital market support will provide the necessary guarantees for the overseas journey, and how to transform capital into sustainable overseas competitiveness will be a core issue facing the company. We will continue to pay attention to Dongpeng Beverage's journey to the sea.