Difficult for the track to break out, unable to hide the stock price decline: Dongpeng Beverage's growth pressure after 20 billion yuan | Dayu Finance

By the end of March, at the World Superbike Championship (WSBK) event in Portugal, the Chinese brand “Zhangxue Motorcycles” achieved consecutive championships. Along with the race bikes appearing on global broadcast cameras, the sponsor “Dongpeng Special Drink” logo quickly drew attention on social media. What contrasts with the fiery passion on the track and the heat in the opinion arena is that the capital markets delivered a completely different response.

On March 31, Dongpeng Beverage (605499.SH) A-share price fell 9.97% in a single day, closing at 205.27 yuan per share. In one day, its market value shrank by more than 10 billion yuan. Between the buzz of dissemination on social media and the capital market’s stock-price drop, the market is re-examining this beverage company whose annual revenue has crossed the 20 billion threshold, focusing on the quality and boundaries of its future growth.

“Cold Reports” behind the Frenzy: Profit Growth Slows and Channel Concerns Emerge

The sprint on the track can rely on passion, but the long-distance run in capital markets ultimately requires scrutiny from financial statements. The direct reason triggering concentrated selling by funds is the latest disclosed annual performance results for 2025 from Dongpeng Beverage.

Judging from full-year figures, this is a performance at the front of the industry: in 2025, operating revenue reached 20.875 billion yuan, up 31.80% year over year; net profit attributable to the parent company was 4.415 billion yuan, up 32.72% year over year. Among them, the core product “Dongpeng Special Drink” recorded full-year revenue of 15.599 billion yuan.

But while the outside world is still cheering Dongpeng’s “low cost, high exposure” marketing, capital’s attention has shifted to marginal changes in the statements. In Q4 2025, the company achieved revenue of 4.031 billion yuan and net profit attributable to the parent company of 654 million yuan. Although revenue continued to grow, the net profit growth rate in the fourth quarter showed a clear slowdown compared with the overall full-year growth rate. The single-quarter revenue growth rate of the core single product “Dongpeng Special Drink” also declined, and this change has led some investors to begin reassessing its earnings resilience.

What has made the market most nervous is not only the slowdown in profit, but also changes in the financial structure. By the end of 2025, the company’s contract liabilities rose to 5.974 billion yuan. Some market analysts believe that, as the related rebate and discount line items increase, the performance of advance receipts reflects the need for further financial verification on the strength of channel incentives versus the true sell-through at terminals.

On March 31, Dongpeng Beverage’s total trading value expanded noticeably throughout the day: short-term funds flowed out, while some institutional funds chose to buy. The market did not form a unified expectation; instead, it is searching for a new valuation equilibrium point through price fluctuations.

Terminal Hot Sales Meet “Fear of Heights” in Capital: A Debate on Value with a 27x P/E Ratio

The cross-border linkage between Zhangxue Motorcycles and Dongpeng Beverage has drawn widespread attention largely because of the narrative that a national brand breaks through the monopoly in international races, as well as marketing that is exceptionally cost-effective. Beyond the noise in the public discourse, against the backdrop of stock price adjustments, the display of shelf space and distribution in first-tier terminals, together with the capital market’s consideration of the P/E ratio, have created a collision of different perspectives.

A portion of investors still remain confident about Dongpeng’s offline channel sell-through capability. One investor shared recent details from grassroots research: “On the evening of March 29 in Chengdu, I observed stock replenishment at a regular grocery store. In the assortment of a large handcart replenishment, only Dongpeng Special Drink had three units; all other beverages were one unit each, including Coca-Cola and Nongfu Spring.” In addition, in sports venue scenarios, Dongpeng Special Drink has also become the first choice for some amateur sports groups due to its “a lot of volume—enough to drink” attribute.

Based on this terminal performance, some long-term investors still look favorably on its long-term value. One investor compared its valuation horizontally: “With Kweichow Moutai at 20 times as the opportunity cost, I would choose Dongpeng Beverage at around 27 times without hesitation. In less than 2 years, Dongpeng Beverage will close this P/E gap.” There are even views that optimistically expect that achieving an annualized return of no less than 20% over the next 5 to 10 years is not difficult at all.

However, facing the deceleration in single-quarter growth, another group of capital has chosen to reduce positions to avoid risks. The focus of the bearish logic lies in the downward revision of future growth expectations. There are market voices indicating that last year’s fourth-quarter growth of Dongpeng Special Drink was only about 9%. If it falls back to a normal growth rate of 10%-20% this year, combined with expectations for an overall adjustment in domestic sales, then in a highly competitive beverage market and with relatively high levels of spending, maintaining the existing high valuation faces significant pressure. Buying at this point carries the risk of a “high-level bag holder.”

Follow the Motorcycle “Going Abroad”: Finding the Second Growth Curve and a Profit Test

Zhangxue Motorcycles’ championship in Portugal represents China’s manufacturing breakthrough in breaking through on the world’s top racing stage. Coincidentally, Dongpeng Beverage is also trying to cross its own comfort zone, pushing forward multi-category expansion and an overseas foray strategy. However, this also faces a practical test of profitability.

Over the past two years, Dongpeng Beverage has focused on the “1+6” multi-category strategy. In 2025, the electrolyte beverage “Dongpeng Hydration” achieved revenue of 32.74 billion yuan, up 118.99% year over year, and its share of total revenue increased to 15.70%. The revenues of products such as “Guo Zhi Tea” and “Dongpeng Daka” each exceeded 5 billion yuan.

Although the multi-category matrix has reached a certain scale, differences in gross margin among product categories are beginning to become apparent. In 2025, the gross margin of energy drink products was 50.79%, while “Dongpeng Hydration,” which is in the electrolyte beverage segment, was 34.77%, and other beverage categories were 15.53%. As the proportion of new categories with low to mid gross margins rises in the revenue mix, it dilutes the company’s overall gross margin to some extent.

In addition, the channel expenses supporting this “second curve” continue to grow. In 2025, Dongpeng Beverage’s sales expenses increased by 27.00% year over year. Among them, investments in terminal freezer equipment to support the “frozenization strategy” led to a substantial 57.55% jump in channel promotion expenses. By the end of the reporting period, Dongpeng Beverage’s offline active terminal outlet network had exceeded 4.5 million stores. With industry coverage expanding, the conversion efficiency of additional investments has become a key focus for the market.

This year in February, the company successfully listed on the Main Board of the Hong Kong Stock Exchange. Part of the funds raised will be used to expand overseas market business. Currently, its products have been exported to 32 countries and regions including the United States, South Korea, Malaysia, Vietnam, and Indonesia. In response, one investor said directly: “After the H-share listing, overseas expansion is unclear, but it will definitely drag down gross margins. Theoretically, entering external low-consumption markets means that domestic growth faces a bottleneck.”

Facing sharp fluctuations in the stock price, Dongpeng Beverage issued an announcement stating that it plans to use 1 billion to 2 billion yuan of its own funds for a share buyback, and it also plans to use 90% of the repurchased shares for cancellation and capital reduction. This measure provided some support for market sentiment, and the stock price subsequently stabilized around 210 yuan.

Brand exposure brought by sponsorship is enough to grab attention, but converting this traffic into real global sales scale still requires time and verification. The upcoming 2026 Q1 earnings report will be the market’s concrete reference to test how this 20-billion-yuan revenue company balances profit performance during its period of multi-category expansion and overseas investment.

Reporter: Du Lin Editor: Liu Dan Proofreader: Tang Qi