Dongpeng Special Drink, last year's sales went crazy!
Recently, Dongpeng Beverage Company announced that its revenue in 2023 will reach 11.263 billion. As soon as the news came out, not only Dongpeng's popularity soared, but the stock price also had an upward trend, as of the close of trading on April 24, the stock price rose to 197.88 yuan per share.
A small state-owned factory on the verge of bankruptcy 30 years ago has become an industry leader worth more than 70 billion yuan in a blink of an eye, and behind Dongpeng's gorgeous turnaround, there is the founder Lin Muqin's unyielding half of his life.
It is estimated that when Lin Muqin took over, he didn't expect that he would have to rely on copycats to save that small factory in the end, let alone that he could turn the small factory into a big group that caused a sensation in the industry with just one copycat product.
It's just that in the face of the imminent lifting of the ban on the original stock in May, can Dongpeng Beverage, whose stock price has always been strong, still hold up?
According to the previous year's financial report disclosed by Dongpeng, the net profit attributable to listed shareholders exceeded 2 billion yuan, of which 1 billion yuan will be used as a shareholder dividend, and the proposed dividend is 25 yuan per share before tax.
Dongpeng has always been serious about making money with shareholders, and it has been listed for less than three years, and it is already the fourth time to pay dividends, and the first three times have a total dividend of up to 2 billion.
However, half of this huge amount of dividends was pocketed by the boss Lin Muqin.
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Lin Muqin, as the founder of Dongpeng Beverage, controls 50.46% of Dongpeng's shares, and it is not surprising that he took the majority of the dividends.
Among the billions of cash dividends and sales of more than 10 billion, Dongpeng Special Drink, a functional drink, has contributed more than 9 percent, and it can be said that Dongpeng Special Drink has almost single-handedly supported the revenue of the entire group.
Today, Dongpeng Special Drink is undoubtedly the leader of Dongpeng Beverage, but when Lin Muqin first took over the company, there was no such drink.
In 1944, Lin Muqin bought the small state-owned factory Dongpeng Beverage, which was on the verge of bankruptcy, ran around the market, looked for resources, and tried his best to revitalize this small factory.
At first, Dongpeng Beverage's main focus was on herbal tea, chrysanthemum tea and winter melon tea, which are traditional carton drinks in Guangdong. Lin Muqin, on the other hand, relied on his previous work experience in the Red Bull foundry to reproduce a similar functional drink - Dongpeng Special Drink.
While maintaining the original business focus, Lin Muqin actively develops the product market of Dongpeng Special Drink.
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After some research, Lin Muqin locked the target customer group of Dongpeng Special Drink to the blue-collar group.
Red Bull's products are priced at a high price, making it difficult for workers and truck drivers who really need a special refreshing functional drink to afford.
So, in 2003, when Red Bull was busy sponsoring NBA and other large-scale sports competitions, Dongpeng began to make silent efforts to restructure the original state-owned enterprises into private joint-stock enterprises.
After the successful restructuring, Dongpeng Beverage gradually got on the right track, and it took Lin Muqin 7 years to increase the total output value from more than 10 million to more than 200 million.
However, in the first few years after Lin Muqin took over, Dongpeng Special Drinks was not the main product, and it was not until 2009 that Dongpeng Beverage focused its business on functional drinks.
Since then, Dongpeng Special Drink's "cottage" hat has also begun to become more and more stable.
Dongpeng Special Drink not only copied Red Bull with the formula, but later even "picked up people's teeth", picked up Red Bull's previous advertising creativity, and swept the market.
Dongpeng's circle-breaking advertising slogan is very similar to another advertising slogan that Red Bull had previously scrapped, so the advertising money that Red Bull had invested before undoubtedly made a lot of wedding dresses for Dongpeng.
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In addition to modifying the advertising words, Dongpeng Special Drink also launched a series of new marketing strategies.
In 2013, he began to invite star Nicholas Tse to be the spokesperson, and later successively named many TV shows and large-scale sports competitions, and even many TV series have their soft advertising.
Since 2015, Dongpeng has introduced the technology of "one thing, one code", and printed unique codes on the packaging of various specifications of products, so that consumers and dealers can directly receive Dongpeng's rebate red envelopes by scanning the code.
With the blessing of Dongpeng Special Drink, Dongpeng Beverage's value has risen, and it was successfully listed on the Shanghai Stock Exchange in 2021, with a market value of 26 billion yuan at that time, and the market value has exceeded 77 billion yuan in less than three years now, and it has exceeded 110 billion yuan at its peak.
In the years when Dongpeng Special Drink was developing at its most rapid, Red Bull was in the midst of infighting and was too busy to take care of itself.
Red Bull originally belonged to the Thai Tencel Group, founded by Thai Chinese Xu Shubiao, and began to try to expand the Chinese market as early as 1993.
It was difficult for Xu Shubiao to squeeze into the Chinese market alone, so a year later, Xu Shubiao reached a cooperation with Yan Bin, chairman of Reignwood Group, and Yan Bin acted as an agent for Red Bull's business in China for 50 years.
The win-win cooperation situation lasted until 2012, after Xu Shubiao's death and Thailand's Tencel Group was handed over to his son, Thai Red Bull and China Red Bull began to disagree.
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China's Red Bull's annual sales of more than 20 billion yuan have attracted Thailand's eyes.
As a result, in 2016, Thailand Tencel Group sued Reignwood Group and all its factories and distributors in court, accusing China Red Bull of trademark infringement and unfair competition.
And this Red Bull infighting incident has lasted for seven years.
Just when Red Bull was busy with infighting, many peers took advantage of the situation and snatched a lot of market share, among which the biggest benefit is undoubtedly Dongpeng Special Drink.
In China's Red Bull's declining 28.8% market share, Dongpeng Special Drink accounts for almost half.
With the successive release of the 2023 financial statements of other listed companies, it can be seen that Dongpeng Beverage's revenue ranks first in the beverage and dairy industry to which it belongs, with a total revenue of 3.178 billion more than the sum of the second place Microcolando and the third place VV shares.
So far, Dongpeng Special Drink has also turned from a cottage drink to one of the top products in the industry with an annual sales of 10 billion.
In addition to marketing, the biggest advantage of Dongpeng Special Drink is its cost performance.
Only half the price of Red Bull can buy Dongpeng special drinks of the same specification, with this cost-effective advantage, Dongpeng is favored by the blue-collar market.
However, in addition to cost performance, another major reason why consumers are willing to pay is the convenience of drinking.
Red Bull uses cans, and Dongpeng switches to plastic bottles, a design change that not only saves costs, but is also more convenient for many workers. They don't have to worry about spilling and wasting their unfinished beverages, and they don't have to worry about contamination from the leftovers.
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What's more intimate is that Dongpeng Special Drink has a double-lid design, a dust-proof outer cover and an inner lid, which is deeply liked by many freight drivers.
Although it was originally designed to have a lid that would be equivalent to a cup to share with others, consumers have gradually discovered many other uses.
For example, the inner lid can act as a bottle cap on its own, and then pour a little drink from the bottle into the outer cap, which can be used as a disposable ashtray, which is very popular with all kinds of truck drivers.
It is a small design that has created the unique style of Dongpeng Special Drink, and similarly there is another functional drink scream, which also retains a lot of repeat customers by its packaging.
However, after Dongpeng Special Drink gradually became a big hit in the industry, Dongpeng Beverage ushered in new problems.
It is gratifying that Dongpeng Special Drink can support tens of billions of sales, but the structure of relying on super single products to support total revenue may be a valuable advantage for small enterprises, and it is a problem for large groups with a valuation of tens of billions.
Too single industrial structure is equivalent to betting everything on one product, as long as this product starts a little bit, it may bring about a catastrophe.
As a result, Dongpeng Beverage began to actively deploy and carry out the "1+6 multi-category strategy", continuing to focus on functional drinks while launching other beverage categories in a timely manner.
Judging from the financial report of the previous year, the sales proportion of other beverages such as Dongpeng Hydration increased by 4.37% in 2022, proving that Dongpeng Beverage's pan-category play has achieved initial results, and the second growth curve has gradually taken shape.
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However, the upgrading of the industrial structure is not an easy task, so it is not surprising that the second Dongpeng special drink cannot be held for the time being.
With the expansion of Dongpeng's beverage industry layout, production capacity must also keep up.
In March this year, Dongpeng Tianjin production base officially started, with a registered capital of up to 200 million yuan, and an estimated annual output value of no less than 800 million yuan after full completion.
Prior to this, Dongpeng has nine bases put into operation one after another, with a total annual production capacity of about 2.8 million tons.
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Although Dongpeng is about to have ten bases to escort the strategy of expanding categories, the road ahead is still not easy.
Although the multi-category strategy has achieved initial results, the competition in the functional beverage area is also quite large, with not only established companies such as Nongfu Spring, Dali Garden, and Jianlibao participating, but also new brands such as Yuanqi Forest and War Horse entering the game.
For Dongpeng Beverage, it is equally important to hold the original position and capture the new territory.
In January this year, Junzheng Investment, one of Dongpeng's major shareholders, announced a shareholding reduction plan, with the intention of reducing Dongpeng's shares by no more than 12,000,300 shares.
If the plan can be fully realized, Junzheng Investment will cash out about 2 billion in cash.
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On the one hand, the shareholders' eye-catching cash-out actions, and on the other hand, the dazzling financial report of the previous year, the shareholders of Dongpeng Special Drink are testing back and forth between joy and anxiety.
After all, May is the period for the lifting of the ban on the original shares, and from the perspective of the previous reduction of shareholders and executives, more shares will inevitably be sold at that time, and once there is a large-scale reduction of the original shares, stock price fluctuations are inevitable.
Relying on the stock price pulled up by the beautiful financial report in 2023, I don't know if it will be able to withstand the impact of shareholders' reductions.
Nowadays, the track of functional drinks is becoming more and more volatile, and new and old players are riveting to rush forward, and finally companies with many advantageous products are bound to seize a larger market share.
In just three years after its listing, Dongpeng Beverage has created a shareholder dividend of 3 billion, which can no longer be said to be the same as the small factory on the verge of bankruptcy back then.
It's a pity that after 30 years of hard work, there is still only one "copycat product" that can be used best, and in the end, it is Dongpeng Special Drink that bears all the pressure.
The success of Dongpeng Special Drink is not only a reward for Dongpeng in the past era, but also a test for the current and future market.
In the increasingly competitive functional beverage track, whether Dongpeng Beverage can continue to dominate the market, Dongpeng Beverage has a long way to go.
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Resources:
Economic Observer: From a cottage to a brother? Behind the rise of Dongpeng Beverage
Investment community: Today, another Chaoshan bigwig's IPO rings the bell: Dongpeng Beverage's market value is 26 billion
Chief Brand Observation: Dongpeng, finally no longer sleepy
Author: Waiting for the wind
Editor: Ichiyigi