Core Viewpoint - Dongpeng Beverage has submitted an application for listing on the Hong Kong Stock Exchange, with a strong market position in the functional beverage sector and significant revenue growth prospects [1][3]. Company Overview - Dongpeng Beverage is the leading functional beverage company in China, ranking first in revenue growth among the top 20 listed soft drink companies globally [3]. - The company has maintained its position as the top player in the Chinese functional beverage market for four consecutive years since 2021, with market share increasing from 15.0% in 2021 to 26.3% in 2024 [3]. - By retail revenue, Dongpeng is projected to be the second-largest functional beverage company in 2024, holding a market share of 23.0% [3]. - The company has built a strong brand with national influence, focusing on product innovation and a diversified product portfolio [3]. Sales and Distribution Strategy - Dongpeng Beverage employs a refined channel management strategy, utilizing a "product + service" model supported by a sales team of over 7,000 [4]. - The company has implemented advanced tracking technologies, including a unique QR code system for product traceability, enhancing operational efficiency [4]. - As of June 30, 2025, Dongpeng has connected with over 250 million consumers and interacted efficiently with over 420 million retail points [4]. Industry Insights - The Chinese soft drink market is projected to reach approximately RMB 1.3 trillion in retail sales by 2024, making it the second-largest soft drink consumption market globally [5]. - The functional beverage segment is the fastest-growing sector, with a compound annual growth rate (CAGR) of 8.3% from 2019 to 2024, outpacing the overall soft drink market growth of 4.7% during the same period [5]. - The energy drink market in China is expected to reach RMB 180.7 billion by 2029, with a CAGR of 10.3% from 2025 to 2029 [5]. Financial Performance - Dongpeng Beverage's revenue for the fiscal years 2022, 2023, 2024, and the first half of 2025 was approximately RMB 8.5 billion, RMB 11.26 billion, RMB 15.83 billion, and RMB 10.73 billion, respectively [7]. - The total comprehensive income for the same periods was approximately RMB 1.43 billion, RMB 2.06 billion, RMB 3.36 billion, and RMB 2.35 billion [7].

Company Overview - Dongpeng Beverage Group Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, with Huatai International, Morgan Stanley, and UBS serving as joint sponsors [1] - Dongpeng Beverage is recognized as the leading functional beverage company in China, with the fastest revenue growth among the top 20 listed soft drink companies globally [3] Market Position - Dongpeng Beverage has maintained the number one position in the Chinese functional beverage market for four consecutive years since 2021, increasing its market share from 15.0% in 2021 to 26.3% in 2024 [3] - By retail value, Dongpeng Beverage is projected to be the second-largest functional beverage company in 2024, holding a market share of 23.0% [3] Financial Performance - The company's revenue for the fiscal years 2022, 2023, 2024, and the first half of 2025 was approximately RMB 8.5 billion, RMB 11.26 billion, RMB 15.83 billion, and RMB 10.73 billion respectively [5][6] - The total comprehensive income for the same periods was approximately RMB 1.43 billion, RMB 2.06 billion, RMB 3.36 billion, and RMB 2.35 billion [6] Industry Insights - The retail value of China's soft drink industry is expected to reach approximately RMB 1.3 trillion in 2024, making it the second-largest soft drink market globally [5] - The functional beverage segment is the fastest-growing sector, with a compound annual growth rate (CAGR) of 8.3% from 2019 to 2024, surpassing the overall soft drink market growth of 4.7% during the same period [5] Operational Strategy - Dongpeng Beverage employs a refined channel management strategy and a unique "product + service" model, supported by a sales team of over 7,000 [4] - The company has established a comprehensive digital operation system that enhances sales growth, decision-making accuracy, and cost efficiency, connecting with over 250 million consumers and more than 4.2 million retail outlets [4]

Core Viewpoint - Dongpeng Beverage Group Co., Ltd. has submitted a listing application to the Hong Kong Stock Exchange, with Huatai International, Morgan Stanley, and UBS as joint sponsors. This follows a previous application submitted on April 3, 2025 [1]. Company Overview - Dongpeng Beverage is the leading functional beverage company in China, ranking first in revenue growth among the top 20 listed soft drink companies globally. The company's market share in the Chinese functional beverage market has increased from 15.0% in 2021 to 26.3% in 2024 [3]. - The company has established a strong brand presence over 30 years, providing high-quality beverages and achieving nearly 100% coverage of prefecture-level cities in China with over 4.2 million sales points as of June 30, 2025 [3]. Business Strategy - Dongpeng Beverage employs a refined channel management strategy and a unique "product + service" model, supported by a sales team of over 7,000. The company has implemented advanced tracking technologies to enhance product traceability and operational efficiency [4]. - The company has built a comprehensive digital operation system that connects with over 250 million consumers and interacts efficiently with over 4.2 million sales points and more than 3,200 distribution partners [4]. Industry Insights - The Chinese soft drink market is projected to reach approximately RMB 1.3 trillion in retail sales by 2024, making it the second-largest soft drink consumption market globally. The functional beverage segment is the fastest-growing, with a compound annual growth rate (CAGR) of 8.3% from 2019 to 2024 [5]. - The energy drink sector in China is expected to reach RMB 180.7 billion by 2029, with a CAGR of 10.3% from 2025 to 2029 [5]. Financial Performance - Dongpeng Beverage's revenue for the fiscal years 2022, 2023, 2024, and the first half of 2025 was approximately RMB 8.5 billion, RMB 11.26 billion, RMB 15.83 billion, and RMB 10.73 billion, respectively. The total comprehensive income for the same periods was about RMB 1.43 billion, RMB 2.06 billion, RMB 3.36 billion, and RMB 2.35 billion [7][8].

Core Viewpoint - Dongpeng Beverage is the leading functional beverage company in China and globally, with significant revenue growth and market share expansion in the functional drink sector [1] Company Summary - Dongpeng Beverage submitted its Hong Kong IPO prospectus on April 3, which became invalid after six months on October 3, with Huatai International, Morgan Stanley, and UBS serving as joint sponsors [1] - The company has ranked first in the Chinese functional beverage market for four consecutive years since 2021, according to a report by Frost & Sullivan [1] - Dongpeng's market share in the functional beverage sector has increased from 15.0% in 2021 to an estimated 26.3% in 2024 [1] Industry Summary - Dongpeng Beverage is recognized as the fastest-growing company among the top 20 listed soft drink companies globally, leading in revenue growth [1]

Core Viewpoint - Dongpeng Beverage Group Co., Ltd. is a leading functional beverage company in China and globally, with significant revenue growth and market share expansion in the functional beverage sector [1] Company Summary - Dongpeng Beverage submitted its Hong Kong IPO application on April 3, which became invalid after six months on October 3, with Huatai International, Morgan Stanley, and UBS serving as joint sponsors [1] - The company ranks first in the Chinese functional beverage market by sales for four consecutive years since 2021, with its market share increasing from 15.0% in 2021 to 26.3% in 2024 [1] Industry Summary - Dongpeng Beverage is recognized as the fastest-growing company among the top 20 listed soft drink companies globally, leading in revenue growth [1]

Industry Insights - The coconut water market in China is expected to continue its rapid growth, with a projected increase from $49.7 million in 2019 to $1,018.1 million by 2024, reflecting a compound annual growth rate (CAGR) of 82.9% [1] - Over the next five years, the market is anticipated to maintain a strong growth rate of 20.2%, reaching $2,550.4 million by 2029 [1] - Key drivers of this growth include rising health awareness, improved distribution channels, expanded consumer demographics, and customized products [1] - The company is projected to hold a 33.9% market share in the coconut water beverage sector in China by 2024, significantly outpacing the second-largest competitor by over seven times [1] - Per capita consumption of coconut water in China, Hong Kong, and the U.S. is expected to be 0.1, 0.3, and 1.2 liters respectively in 2024, indicating potential for threefold growth in mainland China compared to Hong Kong and twelvefold compared to the U.S. [1] Company Performance - The company reported a revenue of $158 million in 2024, marking an 80.29% year-on-year increase, with a profit of $33 million, up 98.85% [2] - The revenue contributions from the IF and Innococo brands were $131 million and $26 million, accounting for 83.31% and 16.64% of total revenue respectively [2] - Revenue from mainland China and Hong Kong was $146 million and $7 million, representing 92.39% and 4.57% of total revenue [2] - Approximately 50% of the company's sales in mainland China were distributed through online channels, with Tmall, JD, and Douyin contributing 50%, 20%, and 15% of online sales respectively [2] - The company's gross margins improved from 34.70% in 2023 to 36.70% in 2024, while net margins increased from 19.16% to 21.13% [2] - The high net profit margin is attributed to low operating expenses due to the company's light asset model and a stable competitive landscape [2] Profit Forecast and Investment Recommendation - The company is expected to achieve revenues of $200.91 million, $271.34 million, and $355.23 million in 2025, 2026, and 2027, with year-on-year growth rates of 27.44%, 35.06%, and 30.91% respectively [3] - Projected net profits for the same years are $38.59 million, $55.93 million, and $74.71 million, with growth rates of 15.83%, 44.93%, and 33.58% [3] - Corresponding earnings per share (EPS) are forecasted to be $0.14, $0.21, and $0.28, with price-to-earnings (PE) ratios of 27, 18, and 14 times [3] - The company is given a "buy" rating based on these projections [3]

Investment Rating - The industry rating is maintained as "Outperform" [6] Core Views - The high-end liquor prices have rebounded, which may temporarily boost market confidence. The current Shenyin Wanguo white liquor index PE-TTM is at 18.66X, which is 3.13% lower than the reasonable level over the past decade. The dividend returns from leading liquor companies are attractive, and consumer spending is expected to gradually recover, suggesting a focus on recovery opportunities in the sector [1][13][19]. Summary by Sections Market Performance Review - From September 22 to September 26, the food and beverage sector declined by 2.49%, while the Shanghai Composite Index increased by 0.21% and the CSI 300 Index rose by 1.07%. Specific sub-sectors include soft drinks (+0.86%), meat products (-0.02%), beer (-0.77%), snacks (-1.33%), and others [20]. Weekly Updates - **Liquor**: The white liquor sector fell by 3.03%, underperforming the overall food and beverage sector. High-end liquor prices have increased, with Feitian Moutai rising by 90 yuan per bottle over five days. Despite slight pressure on consumption, the price increase may boost market confidence [1][13]. - **Yellow Wine**: Key players like Kuaijishan and Guyuelongshan saw declines of 5.80% and 2.24%, respectively. The sector is entering a verification phase for product distribution and sales [2]. - **Beer**: The beer sector decreased by 0.77%. Notable companies include Qingdao Beer (+0.2%) and Yanjing Beer (+1.7%). Future consumption policies are expected to drive sales recovery [2][14]. - **Soft Drinks**: The soft drink sector showed positive performance, with significant gains from companies like Yangyuan Beverage (+32.49%) and Jinziham (+11.93%). The sector remains attractive due to ongoing trends [3][15]. Investment Recommendations - **White Liquor**: Focus on three main lines: strong beta stocks (e.g., Jiugui Liquor, Shui Jing Fang), recovery concept stocks (e.g., Yingjia Gongjiu), and strong alpha stocks (e.g., Shanxi Fenjiu, Guizhou Moutai) [19]. - **Beer**: Emphasize three main lines: sustained growth stocks (e.g., Dongpeng Beverage, Nongfu Spring), potential performance rebound stocks (e.g., Angel Yeast), and category expansion stocks (e.g., Kuaijishan) [19]. Sector and Individual Stock Performance - The food and beverage sector's dynamic PE ratio is 21.0 times, ranking 22nd among primary industries. The soft drink sector has the highest valuation increase this week, while the health product sector saw the smallest decrease [28]. Key Data Tracking - The average price of fresh milk in major production areas is 3.03 yuan per kilogram, reflecting a year-on-year decrease of 3.50%. The decline in prices has been narrowing since the beginning of the year [18].

Investment Rating - The report assigns a "Buy" rating for IFBH (6603.HK) with a first-time coverage [1]. Core Insights - The coconut water industry in China is expected to maintain rapid growth, with IFBH holding a leading market position [5][13]. - The company's revenue is projected to grow significantly, supported by a light asset business model that ensures high profitability [29][41]. - The report highlights the potential for further market share growth in the coconut water sector, especially when compared to other beverage categories [22][25]. Industry Overview - The coconut water market in mainland China is projected to grow from $49.7 million in 2019 to $1,018.1 million by 2024, with a compound annual growth rate (CAGR) of 82.9% [15]. - The industry growth is driven by increasing health awareness, improved distribution channels, and a broader consumer base [15]. - By 2029, the market size is expected to reach $2,550.4 million, indicating a continued strong growth trajectory [15]. Company Performance - In 2024, IFBH's revenue is expected to reach $158 million, a year-on-year increase of 80.29%, with a net profit of $33 million, up 98.85% [41]. - The company maintains a high gross margin of approximately 36.7% and a net margin of 21.13% in 2024 [43]. - The revenue from the IF brand accounts for over 83% of total sales, with the majority of revenue generated from mainland China [46]. Market Position - IFBH holds a 33.9% market share in the coconut water segment in mainland China, significantly ahead of its closest competitor [18]. - The company has consistently ranked first in the coconut water market in both mainland China and Hong Kong since 2020 [18][21]. - The report notes that the per capita consumption of coconut water in mainland China is still low compared to markets like Hong Kong and the U.S., indicating substantial growth potential [27]. Business Model - IFBH employs a light asset model, outsourcing manufacturing and logistics, which helps maintain low operational costs and high profitability [29][41]. - The company focuses on brand operation, product development, and marketing while relying on third-party distributors for sales [30][64]. - The report emphasizes the importance of brand equity and product development capabilities over owning production facilities [71]. Future Outlook - Revenue forecasts for 2025-2027 suggest continued growth, with expected revenues of $200.91 million, $271.34 million, and $355.23 million, respectively [41]. - The company plans to expand its product offerings beyond coconut water, including fruit-based beverages and plant-based drinks [47]. - The strategic partnership with COFCO is expected to enhance distribution capabilities and market reach [70].

Investment Rating - The report assigns an "Outperform" rating to multiple companies in the consumer staples sector, including Guizhou Moutai, Wuliangye, and others, indicating a positive outlook for these stocks [1]. Core Insights - The wholesale prices of Baijiu have mostly declined, with notable decreases in prices for Guizhou Moutai and Wuliangye, while prices for most consumer goods remain stable [4][10]. - The report highlights a significant drop in the discount rates for liquid milk products, indicating a shift in consumer purchasing behavior [6][18]. - Overall, the report suggests that the impact of funds is greater, advising attention to low-position stocks and heavyweight stocks in the consumer staples sector [8]. Summary by Sections Baijiu Pricing - Guizhou Moutai's wholesale prices for Feitian (case and single bottle) are 1790 and 1770 yuan, respectively, reflecting a decrease of 55 and 70 yuan from the previous month [4][37]. - Wuliangye's eighth-generation price is 895 yuan, down 25 yuan from last month [4][37]. - Luzhou Laojiao's Guojiao 1573 price increased by 10 yuan to 850 yuan [4][37]. Consumer Goods Pricing - The average discount rate for liquid milk products decreased from 74.8% to 69.4% since the end of August [6][21]. - Discount rates for soft drinks, condiments, instant foods, and beer remained stable, with slight variations in average and median values [19][35]. - The report notes that the discount rate for infant formula products also showed a minor decrease from 89.5% to 88.7% [21][35]. Investment Strategy - The report emphasizes the importance of monitoring low-position stocks and heavyweight stocks due to the greater impact of funds on the market [8].

Investment Rating - The report provides various investment ratings for companies in the consumer staples sector, with "Outperform" ratings for several companies including China Feihe, Haidilao, and China Resources Beer, while Budweiser APAC is rated "Neutral" [1]. Core Insights - The overall cost indices for six categories of consumer goods showed mixed trends, indicating stability in the market. Spot cost indices for soft drinks, beer, instant noodles, dairy products, frozen foods, and seasonings changed by +0.97%, +0.51%, +0.26%, -0.13%, -0.44%, and -0.57% respectively, while futures cost indices changed by -1.08%, +1.06%, -1.06%, -1.67%, -0.78%, and -0.06% respectively [31][32][33][34][35][36][37]. Summary by Category Beer - The spot cost index for beer increased by 0.51% month-on-month, while the futures index rose by 1.06%. Year-to-date, the spot and futures indices have decreased by 3.71% and 4.95% respectively [12][32]. Seasonings - The spot cost index for seasonings decreased by 0.57% month-on-month, while the futures index fell by 0.06%. Year-to-date, the indices have changed by -2.41% and -6.71% respectively [15][33]. Dairy Products - The spot cost index for dairy products decreased by 0.13% month-on-month, while the futures index fell by 1.67%. Year-to-date, the indices have changed by -3.36% and -3.93% respectively [18][34]. Instant Noodles - The spot cost index for instant noodles increased by 0.26% month-on-month, while the futures index decreased by 1.06%. Year-to-date, the indices have changed by -3.23% and -6.06% respectively [22][35]. Frozen Foods - The spot cost index for frozen foods decreased by 0.44% month-on-month, while the futures index fell by 0.78%. Year-to-date, the indices have changed by -2.3% and -3.37% respectively [25][36]. Soft Drinks - The spot cost index for soft drinks rose by 0.97% month-on-month, while the futures index fell by 1.08%. Year-to-date, the indices have changed by -4.19% and -10.86% respectively [28][37].