China’s Eastroc Beverage readies Hong Kong listing

Core Viewpoint - Eastroc Beverage is preparing to raise up to HK$10.14 billion ($1.3 billion) through a Hong Kong share offering, aiming to enhance its market value to over HK$166 billion post-listing [1] Group 1: Financial Performance - The company's revenue increased from 8.5 billion yuan in 2022 to 15.83 billion yuan in 2024, achieving a compound annual growth rate (CAGR) of 36.5% [4] - For the nine months ended September 30, 2025, revenue rose 34.1% year-on-year to 16.83 billion yuan [4] - Net profit grew from 1.44 billion yuan in 2022 to 3.32 billion yuan in 2024, representing a 52% CAGR [4] - Net profit for the nine months ended September 30, 2025, reached 3.76 billion yuan, up 38.9% year-on-year [4] Group 2: Profitability and Cash Flow - Net profit margin expanded from 16.9% in 2022 to 18.1% in 2023, reaching 21% in 2024 and further improving to 22.3% for the nine months ended September 30, 2025 [5] - Net cash flow from operating activities was 2.02 billion yuan in 2022, increasing to 3.28 billion yuan in 2023, 5.78 billion yuan in 2024, and 3.13 billion yuan for the nine months ended September 30, 2025 [5] Group 3: Business Operations and Strategy - Eastroc Beverage's portfolio includes energy and sports drinks, tea and coffee, plant-based protein drinks, and fruit juices [3] - The company operates nine production bases across China and is expanding production capacity at four existing sites while building four new bases [3] - Eastroc is recognized as China's largest maker of functional beverages, including energy and sports drinks, based on sales volume since 2021 [3] Group 4: Investment and Future Plans - The company plans to use the proceeds from the share offering to enhance production capacity, strengthen its supply chain, and invest in marketing [2] - Part of the funds will also be allocated to strengthen distribution and pursue overseas expansion, including potential investments and acquisitions [2] Group 5: Key Investors - Cornerstone investors in the offering include Qatar Investment Authority, Singapore state fund Temasek Holdings, BlackRock, and Tencent [2]