KKR(US:KKR) Sou Hu Cai Jing·2025-07-18 00:59Core Viewpoint - KKR's acquisition of Dayao Soda marks a significant investment in a domestic beverage brand, indicating a shift towards foreign capital in China's beverage market [2][14] Company Overview - Dayao Soda, founded in the 1980s in Inner Mongolia, has become the third-largest player in the sugary soda segment in China [3] - The company has seen a 4.35% year-on-year growth in offline retail sales from January to May 2025 [3] - Dayao's market share in the carbonated beverage category is 2.64%, with a year-on-year growth rate of 11.15% [3] Market Position and Challenges - The sugary beverage market faces challenges due to a growing health trend, making it difficult for brands like Dayao to achieve further growth [3][7] - The carbonated beverage market is currently experiencing a contraction, as reported by Nielsen IQ [8] Expansion Strategy - Dayao has expanded its product offerings to include five categories: carbonated drinks, fruit and vegetable juices, plant protein drinks, energy-flavored drinks, and tea beverages [8] - The company has established a presence in 31 provinces and regions, with over a thousand distributors and access to millions of retail outlets [6][8] Financial and Operational Insights - Over 85% of Dayao's sales come from the restaurant channel, with 78.4% of consumers purchasing through dining establishments [5] - Dayao has invested significantly in production facilities, with a total investment of 1.26 billion yuan in its Shaanxi base and additional investments ranging from 100 million to 500 million yuan in other bases [6] Capital Involvement and Future Prospects - The acquisition by KKR is seen as a strategic move for Dayao to leverage capital for growth and market positioning [11][14] - KKR has a history of investing in consumer-related businesses and aims to enhance profitability and valuation through its acquisition strategy [15][16]