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source | deepblue finance

written by | wu ruixin

drinking one bottle will exceed the limit?

dongpeng beverage, which just made a profit of 1.731 billion in the first half of this year, was recently suddenly accused of being a "sugar assassin" and became the focus of public opinion.

recently, consumer reports sent 12 functional drinks on the market for testing and evaluation. the results showed that 8 of them were high in sugar (more than 7.5g of sugar per 100g of product), exceeding the recommended upper limit of daily free sugar intake (25g), and dongpeng special drink (500ml) had the highest sugar content among them.

the sugar content is as high as 66.5g! this is equivalent to 14 and a half sugar cubes. in other words, drinking one bottle a day will directly exceed the 50g "warning line" recommended by the chinese residents' dietary guidelines.

1

consumption downgrade?

white-collar workers don’t drink coffee, they drink dongpeng, and they made 1.7 billion in half a year

coincidentally, dongpeng beverage just released its semi-annual report not long ago, and its performance was quite impressive.

in the first half of this year, dongpeng beverage's revenue was 7.873 billion, a year-on-year increase of 44.19%; in terms of net profit, it made a huge profit of 1.731 billion in half a year, a year-on-year increase of 56.23%. both revenue and net profit continued to maintain high growth.

what is even more surprising is the change in dongpeng's customer base: white-collar groups such as those working in the internet, advertising, and education and training have emerged, and the age group is also trending towards younger and more white-collar workers. this has overturned the stereotype that energy drink drinkers in the past were mainly manual laborers or transportation drivers.

what’s going on? workers stop drinking coffee and start drinking dongpeng special drink?

some netizens speculated that this might be due to consumption downgrade.

one of the important reasons why dongpeng special drink was able to quickly sweep the market is its low price.

dongpeng special drink has four types of products on the market: 250ml tetra pak, 250ml/500ml bottles, and 250ml cans. the market prices are 2 yuan, 3 yuan/5 yuan, and 4 yuan respectively. the competitor red bull only has one specification, 250ml cans, and the price is more than 6 yuan.

in comparison, dongpeng special drink is not only cheaper and offers consumers more choices, but the bottled version is also more convenient and easier to carry than cans.

compared with coffee, it is even cheaper. chain coffee brands luckin coffee and kudi are now 9.9 yuan, and even the cheaper lucky coffee is 4 yuan. the nestle canned coffee in the supermarket is also priced at 4 yuan. and the cheapest dongpeng special drink is only 2 yuan.

although the price is cheap, the gross profit margin is not low at all.

according to the latest interim report data, dongpeng beverage's gross profit margin is as high as 44.6%, and its net profit margin is 21.98%. among them, dongpeng special drink is undoubtedly the main force. in the first half of this year, it sold 160.48 tons, with a revenue of 6.855 billion yuan and a cost of 3.606 billion yuan. in total, dongpeng special drink's gross profit margin is as high as 47%.

dongpeng beverage has made a fortune relying on its dongpeng special drink product.

from 2021 to 2023, dongpeng beverage achieved revenues of 6.978 billion, 8.505 billion, and 11.26 billion, respectively. net profits were 1.193 billion, 1.441 billion, and 2.040 billion, respectively. in the first half of 2024, dongpeng beverage's performance hit a three-year high.

but behind the continued growth in performance, a problem is also exposed - the income structure is too single.

87% of dongpeng beverage's revenue comes from its single product dongpeng special drink. although dongpeng beverage has also launched other beverages such as dongpeng water replenishment in recent years, they have not made a big splash, and the only beverage that can compete is dongpeng special drink.

this also means that fluctuations in the sales volume of dongpeng special drink will directly affect the performance of dongpeng beverage.

2

one bottle contains up to 66.5g of sugar!

can dongpeng capture young white-collar workers?

but on the other hand, with the evaluation reported by consumers, the high sugar content of dongpeng special drink was also revealed.

according to consumer reports, dongpeng special drink (500ml) is the one with the highest sugar content among the 12 functional drinks on the market, reaching 66.5g, equivalent to 14.6 sugar cubes. the sugar content per 100g is as high as 13.3g. in other words, drinking one bottle a day directly exceeds the 50g "warning line" recommended by the chinese residents' dietary guidelines.

in the ccr comprehensive evaluation of these 12 functional drinks by consumer reports, dongpeng special drink also had the lowest score.

in response to this, dongpeng special drink said: it is recommended to drink one bottle per day.

for the physical laborers such as truck drivers, who are stereotypically the largest consumers of dongpeng special drink, they often drink more than one bottle a day. however, some people may say that physical laborers metabolize the energy in minutes.

but for some white-collar consumers who pursue health, such a high sugar content may deter them.

in the past, people generally believed that functional drinks such as red bull and dongpeng special drink were high in caffeine and taurine. drinking too much of them can refresh you, but overdoing it can cause insomnia. but no one expected that they actually contained high sugar content. this touched the sensitive spot of young white-collar workers.

in recent years, the beverage industry has been swept by the trend of zero sugar and low sugar. under this trend, yuanqi forest took off on the spot, and then the performance of oriental leaves, which has been deeply engaged in sugar-free tea for many years, also soared.

young people are the main force behind this consumption trend.

originally, this group of consumers had little to do with dongpeng beverage. but in the latest interim report, dongpeng beverage took the initiative to disclose that the young white-collar group made an important contribution to the performance growth in the first half of this year.

now that the fact that dongpeng special drink is a "sugar assassin" has been exposed, will the newly growing young white-collar consumers continue to choose dongpeng special drink?

this question is worth pondering.

3

dividends and reduction of holdings

the lin family behind the scenes made a lot of money

dongpeng beverage's performance has been soaring in recent years, and the wealth of its boss lin muqin and his son has also increased.

according to the latest data released by hurun, the net worth of lin muqin and his son has reached 38 billion. in 2023, when their net worth peaked, it reached 41 billion, making them the richest people in shanwei for several consecutive years.

supported by its performance, dongpeng beverage's stock price has continued to rise in recent years, from a low of around 111 yuan in may 2022 to 224.11 yuan today, with a total market value of nearly 90 billion yuan.

but at the same time, executives and shareholders began to sell their holdings frequently.

in july this year, junzheng investment, the second largest shareholder of dongpeng beverage, announced a plan to reduce its holdings. according to the plan, junzheng investment intends to reduce its holdings by a total of 12 million shares, corresponding to a market value of approximately 2.571 billion yuan (calculated based on the closing price on july 2). this is not the first time that junzheng investment has reduced its holdings. from september 2022 to may 2024, it has reduced its holdings by a total of 2.825 billion yuan.

it is understood that junzheng investment was the largest external shareholder of dongpeng beverage before its ipo. at present, junzheng investment's shareholding ratio has dropped to 4.999975%, and it is no longer a shareholder holding more than 5% of the company's shares.

junzheng investment was not the only one to cash out. at the end of may last year, 13 shareholders and directors, supervisors and senior executives of dongpeng beverage also collectively reduced their holdings, reducing their holdings by a total of 7.4395 million dongpeng beverage shares, accounting for 2% of the total share capital, and cashing out 1.369 billion yuan.

so far, in the past two years, dongpeng beverage shareholders have cashed out a total of approximately 4.2 billion yuan.

the largest external shareholder cashed out and left, and the senior management team also collectively reduced their holdings, which caused an uproar in the market.

but in fact, the one who made the most profit was not junzheng investment, but the lin family.

judging from the equity structure, dongpeng beverage has a distinct family business color. the largest shareholder is undoubtedly the boss lin muqin, who holds 49.74% of the shares. among the top ten shareholders, lin mugang and lin daiqin, who hold 5.22% of the shares respectively, are lin muqin's brother and uncle respectively. lin yupeng, a limited partner of shareholder kunpeng investment, is the son of the controlling shareholder lin muqin. shareholder chen haiming, another limited partner of kunpeng investment, chen huanming, and dongpeng yuandao's limited partner chen weiming are brothers, and are also brothers of lin muqin's wife chen huiling.

overall, 60% of the company's shares are in the hands of the lin family.

including the approximately 1 billion yuan profit distribution plan disclosed in the 2024 interim report, dongpeng beverage has distributed a total of 4 billion yuan in dividends since its listing in may 2021, of which the lin family directly received 2.4 billion yuan in cash. lin muqin personally received nearly 2 billion yuan.

during the collective reduction of holdings last year, lin muqin's personal shares did not change on the surface, but in fact he cashed out a lot. among them, dongpeng yuandao's cumulative reduction amounted to 588 million yuan during the period. lin muqin was the ultimate beneficiary of the company, holding 33.83% of the shares. in addition, dongpeng zhiyuan and dongpeng zhicheng, which lin muqin invested in, also reduced their holdings by 273 million yuan and 206 million yuan respectively during the planned period.

however, it is worth noting that while shareholders are cashing out and the lin family is paying out dividends crazily, dongpeng beverage is constantly borrowing money. the interim report shows that in the first half of 2024, dongpeng beverage's short-term loans were 5.69 billion, an increase of 89.96% from 2.995 billion in the same period last year. from 2021 to 2023, dongpeng beverage's short-term loans were 624 million, 3.182 billion, and 2.996 billion, respectively.

but this is understandable. after all, the debt belongs to the company, and the dividend money is your own.