IPO News | 'Functional Beverage Company' East鹏 Beverage launches its IPO, scheduled to list on February 3rd, with a subscription amount of HKD 25,050.11 for one lot

Futu News reported on January 26 that$EASTROC (09980.HK)$The company announced its initial public offering from January 26 to January 29. The company plans to offer approximately 40,889,900 shares globally and is expected to be listed on February 3.

Company Overview

The company is the leading functional beverage enterprise in China, with revenue growth ranking first among the top 20 publicly-listed soft drink companies globally. According to a Frost & Sullivan report, measured by sales volume, the company has ranked first in China's functional beverage market for four consecutive years since 2021, with its market share increasing from 15.0% in 2021 to 26.3% in 2024. In terms of retail value, it was the second-largest functional beverage company in 2024, holding a 23.0% market share, further solidifying its leading position.

The company has always been committed to energizing healthy and beautiful lifestyles for global consumers. After over 30 years of dedication, the company has continuously provided consumers with tasty and cost-effective beverage products, successfully building the beloved "Dongpeng" brand, which has gained national-level influence. The brand proposition, "Tired? Sleepy? Drink Dongpeng Special Beverage," has resonated deeply with consumers, making "Dongpeng Special Beverage" the primary association for the "energy replenishment" scenario in consumers' minds. While reinforcing its leadership in the functional beverage industry, the company has also continued to innovate and iterate products, expanding into diversified product categories, laying a foundation for long-term development.

Financial Overview

The company's revenue increased from RMB 8,500.0 million in 2022 to RMB 15,830.3 million in 2024, with a compound annual growth rate of 36.5% from 2022 to 2024. Revenue for the nine months ended September 30, 2024, grew by 34.1% from RMB 12,551.9 million to RMB 16,837.6 million in the same period in 2025.

For the nine months ended September 30, 2022, 2023, 2024, and 2025, the company recorded gross profits of RMB 3,532.0 million, RMB 4,760.8 million, RMB 6,983.3 million, and RMB 7,477.5 million, respectively, with corresponding gross profit margins of 41.6%, 42.3%, 44.1%, and 44.4%.

Industry Overview

Driven by factors such as growth in per capita disposable income, category expansion, channel diversification, and increasing consumer health awareness, China's soft drink market has continued to grow. Calculated by retail value, the compound annual growth rate from 2019 to 2024 was 4.7%, and it is expected to further increase at a compound annual growth rate of 5.8% from 2025 to RMB 1,686 billion by 2029. Among this, functional beverages represent the fastest-growing sub-category within China's soft drink industry.

Increasing consumer health awareness has played a key role in expanding the consumer base and increasing consumption frequency within the soft drink industry. As consumers become more health-conscious, beverage companies have successfully attracted previously less health-focused groups by launching products with low sugar, low calorie, and zero-additive formulas, converting them into active consumers and tapping into previously underserved market segments. Additionally, heightened interest in fitness and wellness has driven increased demand for hydration and nutritional supplement solutions. Functional beverages such as energy drinks and sports drinks have become common staples in workout routines, transitioning from occasional use to purposeful habitual consumption. This behavioral shift has significantly increased purchase frequency, further solidifying the importance of soft drinks in a healthy lifestyle.

Cornerstone Investor

Cornerstone investors have agreed to subscribe for, or procure their designated entities to subscribe for, a total of approximately USD 640 million (or approximately HKD 4.99014 billion) worth of shares under certain conditions based on the offer price. Assuming an offer price of HKD 248 per H-share (the maximum offer price), the total number of shares subscribed by cornerstone investors will be 20,120,000. The cornerstone investors include: Al-Rayyan Holding LLC, Taibai Investment Limited, True Light Investments H Pte. Ltd., BlackRock, Inc., UBS Asset Management (Singapore) Ltd., Tencent, HSG Growth VII Holdco, Ltd., JPMorgan Asset Management (Asia Pacific) Limited, Azure Skylines Limited, Taikang Life Insurance Co., Ltd., Pacific Century Pines Investments 1 Limited, Fidelity Management & Research (Hong Kong) Limited, Velmar Company Limited, Pinpoint Asset Management Limited, Amazing Mountain Limited, Great China Motivation Fund Phase II L.P.

Use of Proceeds

Regarding the use of proceeds, Eastroc Beverage expects the net proceeds from the global offering to amount to approximately HKD 9.9943 billion (assuming the over-allotment option is not exercised, calculated at an offer price of HKD 248). According to the prospectus, Eastroc Beverage intends to allocate the proceeds raised from the global offering for the following purposes:

Approximately 36.0% will be used to improve production capacity layout and advance supply chain upgrades over the next three to five years, meeting the company’s rapid growth needs while continuously enhancing production and supply efficiency and reinforcing cost advantages; about 15.0% will be allocated to strengthening brand building and consumer engagement over the next three to five years, continuously enhancing brand influence; approximately 11.0% will be used to continue advancing the nationwide strategy over the next three to five years, expanding, deepening, and refining channel network operations; around 12.0% will be directed toward expanding overseas market business and exploring potential investments andMergers and acquisitionsopportunities; approximately 10.0% will be utilized to strengthen digitalization across various business processes over the next three to five years; about 6.0% will be dedicated to enhancing the company’s product development capabilities and continuing to expand product categories over the next three to five years; around 10.0% will be used for working capital and general corporate purposes.