A+H listing strategy: Can it carry forward Dongpeng’s growth ambitions?
```
The nascent global deployment of Dongpeng Beverage is increasingly becoming an important part of its growth narrative.
Co-President Jiang Weiwei recently stated that 2025 will be Dongpeng’s “first year of going overseas.” Its products have already entered more than 20 countries and regions, including Vietnam and Indonesia, and it plans to further accelerate overseas expansion next year.
In April 2025, Dongpeng's Hainan production base, with an investment of 1.2 billion yuan, officially broke ground. According to the plan, while serving nearby regions, it will become a springboard for exploring Southeast Asian and global markets.
Progress in listing on the Hong Kong stock market is expected to open up an important overseas financing window for Dongpeng.
In December, Dongpeng's Hong Kong IPO was registered with the securities regulators. The raised funds will be used for overseas supply chain deployment, brand building, channel development, and exploring potential investment and acquisition opportunities.
Behind Dongpeng’s high-profile globalization push is intensifying domestic competition and a shift in Dongpeng’s own development stage.
From 2022 to 2024, the company’s compound revenue growth rate exceeded 36%; in the first half of 2025, revenue was 10.74 billion yuan, and net profit was 2.38 billion yuan, both maintaining a year-on-year growth of over 36%.
Just as the market expected its annual revenue to break the 20 billion yuan mark, its growth momentum started to change.
In the third quarter, Dongpeng Energy Drink’s revenue was 4.2 billion yuan, with a year-on-year growth rate slowing to 15%, the lowest in nearly three years; growth in its Guangdong base market was only 2%.
In the domestic market, as the category dividend of “replacing Red Bull” fades, diversified exploration remains uncertain, and Dongpeng may have to face pressure from slowing growth.
Meanwhile, overseas market environments vary, local operation poses significant challenges, and Dongpeng’s domestic strategies may face adaptation issues during the transition.
How Dongpeng will respond to this new competitive landscape remains to be seen.
Challenges of Going Overseas
Dongpeng Beverage’s business strategies have always centered around the core positioning of “high cost performance.”
Its core product, the 500ml “Big Gold Bottle” Dongpeng Special Drink, is priced at 5 yuan, which is 1 yuan cheaper than Red Bull’s similar 350ml product. Early on, it seized on the popularization of mobile payment, aggressively marketing “scan the code to win a red envelope” and “1 yuan enjoyment,” driving repeat purchases from consumers.
Although the scan-to-win promotions are similar in format to the traditional “win another bottle,” and other brands have since adopted similar strategies, none have achieved Dongpeng’s level of success.
Lu Shengzhen, GM of Sparks Marketing Planning, told Xinfeng that the reason is most companies’ mechanism designs favor their own interests, leading to high barriers for merchants to participate, complicated redemption, and insufficient immediate incentives.
For a Dongpeng Special Drink retailing at 5 yuan per bottle, the factory price is around 2 yuan, leaving about 3 yuan of channel margin. Combined with various discounts, fees and red envelope incentives, its terminal gross profit per bottle exceeds industry standards.
Leveraging the “scan code” digital system, Dongpeng has significantly reduced losses in cost through middle channels. Its “five codes in one” system allows real-time inventory management, improving overall turnover efficiency and effectively curbing cross-region sales and excessive inventory.
In 2024, Dongpeng’s sales expense ratio was 16.9%, lower than Nongfu Spring’s 21.4% and China Resources Beverage’s 30%; inventory turnover cycle was only 34 days, nearly one and a half months shorter than Nongfu Spring’s.
Thus, even while consistently pursuing cost performance and sharing profits with channels, Dongpeng has fully unleashed economies of scale in the past three years, achieving 52% compound annual net profit growth, significantly higher than revenue growth of 36%.
However, when Dongpeng turns to overseas markets, its channel networks and cost advantages built over the years no longer apply, and its mature domestic business model faces new challenges.
In Southeast Asia, the first stop overseas, the energy drink market exceeds 20 billion yuan, with a compound growth rate of 6.2% over the past five years, higher than China’s 4.7%.
The consumer base is relatively young, with a high proportion of manual laborers, which closely matches the target customers of functional drinks.
According to HuaAn Securities analyst Deng Xin, compared to Pepsi’s Sting and major Thai brands like Red Bull and M150, Dongpeng is more competitive on cost-performance; compared to local small and medium brands, it also has advantages in brand strength, packaging specs, and product added value.
In her view, Dongpeng’s current opportunity is to localize quickly and capture market growth dividends.
In the Southeast Asian market, Dongpeng has already initiated integrated marketing such as event sponsorships and offline sampling, as well as bringing in successful domestic interactive promotions like “scan the code for red envelopes” and offline ads to boost brand awareness.
In terms of pricing, the company mainly uses a “reverse pricing” strategy—setting terminal retail price based on target market price range, then ensuring profits via supply chain and cost management.
However, to maintain its “high cost-performance” competitive edge abroad long-term, Dongpeng must adopt more refined and targeted strategies in each region.
Vice President Hu Yajun of Dongpeng Group noted that if using domestic supply chains, adaptation to target markets must be assessed. For example, in Africa, high logistics costs and about 25% tariffs mean great operational difficulty; Europe also faces high shipping costs and tariffs over 20%.
Hu Yajun revealed that Dongpeng is trying diverse overseas models, including agency partnerships, building local teams, joint ventures with foreign firms, and exploring a Coca-Cola-like “bottling plant” franchise model.
Looking ahead, Dongpeng plans to shift manufacturing to upcoming plants in Hainan, Kunming, and Indonesia, gradually replacing shipments from its Guangdong base to lower operating costs.
Currently, though Dongpeng’s products are sold in 25 countries and regions globally, foreign income still accounts for less than 1%, with limited impact on overall performance.
The Challenge of Diversified Categories
According to Guotai Junan, Dongpeng Special Drink is expected to become, by 2026, the fourth beverage single item to reach 20 billion annual sales, after Coca-Cola, Red Bull, and Nongfu Spring.
Facing the increasingly obvious growth ceiling of a single category, diversification has become Dongpeng’s practical choice to open up a second growth curve and drive future development.
Since 2023, Dongpeng has intensively launched new products, continuing its proven approach of high cost performance, “1 yuan shopping” promotions, and generous channel margins.
Among them, the electrolyte drink “Bushuilla” has performed exceptionally well—achieving 390 million yuan in sales in its first year and jumping to nearly 1.5 billion yuan in 2024, up 280% year-on-year, establishing itself as the second growth curve.
With the modular approach established, Dongpeng’s theoretical expansion into tea drinks, coffee drinks, and more categories should become smoother.
But similar to Dongpeng Special Drink, the success of “Bushuilla” also cannot overlook the helping hand of overall market dividends.
In 2022, as health authorities repeatedly emphasized the importance of electrolyte supplementation during exercise, high temperatures, and special illnesses, the domestic electrolyte water market exploded.
At that time, the market was not yet consolidated, and domestic brands represented by Genki Forest’s “Alien Electrolyte Water” quickly rose to take nearly half of the market.
Meanwhile, the consumption scenarios for electrolyte water and taurine energy drinks highly overlapped, allowing Dongpeng to efficiently unleash market momentum by brand extension and channel reuse.
The success of “Bushuilla” is essentially a replication of the competitive advantage formed by “Dongpeng Special Drink.”
However, as category expansion continues and gradually exceeds the boundaries of its strengths, similar market opportunities may become harder for Dongpeng to capture in the future.
In Lu Shengzhen’s view, Dongpeng’s success in functional drinks largely came at a stage when consumers could not differentiate between products, allowing it to fill gaps left by high-end brands through price.
“But when the competition shifts to broader beverage categories, facing many established leaders and followers, Dongpeng’s product differentiation is not strong. In this context, there’s insufficient flexibility either in terminal profit margins or upstream supply chain,” says Lu Shengzhen.
For example, Dongpeng sees potential in fruit tea drinks “Fruit Tea,” whose flavors are modeled after mainstream iced tea products from Master Kong, Uni-President, and Nongfu Spring Tea Pi, all mature sweet tea beverages.
The substance of competition for these new products is in snatching existing market share from these giants.
But compared to giants like Nongfu Spring, which has achieved deep national coverage, Dongpeng Special Drink’s national layout is not yet “complete,” leaving room for potential growth.
In the third quarter of 2025, Dongpeng achieved a 42% year-on-year growth rate outside its base of Guangdong.
This is due to the opening of new regions as well as continued deepening of existing channels.
In recent years, Dongpeng has increased its investment in terminal refrigerators: from less than 80,000 units in 2022 to over 300,000 at the end of 2024, with another 150,000 planned for 2025.
Currently, Dongpeng’s inventory of about 450,000 refrigerators still has much penetration room compared with over 4 million total terminal outlets.
In December this year, Dongpeng established its first production base in northern China, in Tianjin. With 10 of the planned 13 factories now operational, this will further underpin its opening of the northern market.
For FMCG enterprises, differences in channel capabilities directly affect the efficiency of new product promotion and market capture.
If it can keep strengthening channel capacity and improve coverage balance and penetration, its multi-category expansion strategy could open up faster.
Risk disclosure and disclaimerThe market involves risk, and investment should be made cautiously. This article does not constitute personal investment advice and does not take into account the individual investment objectives, financial situation, or needs of any user. Users should consider whether any opinions, views or conclusions herein are suitable for their specific circumstances. Investment based on this information is at your own risk. ```