Economic Observer Network reporter Zhou Yifan How high can the “energy” of Dongpeng Special Drink help the company’s stock price soar?
On June 15th, Dongpeng Beverage (605499.SH) opened a single-digit daily limit, and this is also the 13th single-digit daily limit that the stock has gone out as of today. As the new shares that landed on the main board of the Shanghai Stock Exchange on May 27, based on the current daily limit price of 209.10 yuan per share, the one-time sign that is 1,000 shareholders Peng Beverage can earn close to 160,000 yuan. If Dongpeng Beverage continues to maintain its daily limit in the next two trading days, the company’s market value will exceed 100 billion yuan, and the first-sign profit will reach 206,700 yuan.
According to data from Oriental Wealth Choice, currently, the most profitable IPO company in the A-share market is Kanghua Biotech (300841.SZ) on the GEM, which can earn up to 243,700 yuan per sign. Calculated at the closing price of the day, Dongpeng Beverage’s profit temporarily ranks No. 5. If it hits 200,000 earnings, it will become the second most profitable new stock in the history of A-shares, and it will also be the largest profitable new stock in the coming year this year.
The prospectus shows that the main business of Dongpeng Beverage is the research and development, production and sales of beverages. The main products include Dongpeng Special Drink, Yugan Lemon Tea, Chenpi Special Drink, and packaged drinking water, among which Dongpeng Special Drink is the company’s leading product. As one of the pioneers of energy drinks, Dongpeng Beverages is committed to promoting the development of energy drinks. After years of hard work, it has shaped the “Dongpeng Special Drinks” and other brands that consumers are familiar with. Currently, the company ranks second in the domestic energy drink market share.
According to Euromonitor’s calculations, the sales of energy drinks in my country will increase from 23.493 billion yuan in 2014 to 44.778 billion yuan in 2020, with a compound annual growth rate of 11.35%. It ranks second in the soft drink industry sub-track. The proportion of total beverage sales in my country has reached 7.8%. It is estimated that in 2025, the total sales and per capita sales of my country’s energy drink market will reach 65.485 billion yuan and 46.3 yuan, an increase of 46.24% and 44.69% over 2020.
However, Dongpeng Beverage stated in the prospectus that my country’s energy drink industry has a relatively high degree of marketization. After years of development, well-known brands such as Red Bull, Dongpeng Special Drink, Lehu, Fitness Energy, and War Horse have been formed. The rapid development of China has attracted many participants. In recent years, some well-known companies have launched new energy drink products, such as Goo Ran under Uni-President, XS under Amway, Huan Xing Yuan under Yili, etc. The competition is fierce.
“The functional beverage industry has strong stickiness and first-mover advantages. Consumer demand for functional attributes reduces the uncertainty of consumption. The current market competition pattern is showing a “one super, many strong” situation. Through the analysis of the competitive environment, we He believes that Dongpeng is currently in a relatively good competitive environment, relying on its own capabilities to achieve rapid expansion.” Tianfeng Securities analyst Liu Chang said.
In fact, behind Dongpeng Beverage’s widespread attention by investors, one of the reasons that supports its rising stock price may have something to do with the company’s performance exceeding expectations.
Public data shows that from 2018 to 2020, Dongpeng Beverage’s operating income was 3.938 billion yuan, 4.209 billion yuan and 4.959 billion yuan, and the net profit attributable to the parent was 216 million yuan, 571 million yuan and 812 million yuan, respectively. In the first quarter of this year, the company achieved operating income of 1.711 billion yuan, a year-on-year increase of 83.37%; realized a net profit of 342 million yuan attributable to the parent, a year-on-year increase of 122.52%; realized a net profit of 337 million yuan deducted from the parent, a year-on-year increase of 108.25%.
Kaiyuan Securities also pointed out in the research report that the long-term growth space of the energy drink track is worth looking forward to. At the same time, Dongpeng Beverage, as the second largest energy drink brand in the country, has outstanding competitiveness in the mid-market. In recent years, the company has focused on developing the gap outside the province. The market has strong growth momentum and broad room for nationalization. It is estimated that the net profit attributable to the parent in 2021-2023 is 11.27, 14.90, and 1.905 billion yuan, corresponding to 2.82, 3.73, and 4.76 yuan per share for 2021-2023, a year-on-year increase of 38.8%, 32.2%, and 27.8%. The current price corresponds to 55.8, 42.2, and 33.0 Times P/E ratio.
Liu Chang pointed out that the focus of Dongpeng Beverage’s IPO raised funds is on the national production capacity layout and channel network construction, demonstrating the company’s strategy and determination to expand nationally. The company’s future growth comes from volume on the one hand, and price on the other. With the continuous improvement of its brand tonality, the company’s scene, crowd and category are expected to open up room for growth.
Talking about future performance, Dongpeng Beverage stated in the prospectus that as of the end of 2020, the company’s contract liabilities (advanced accounts) reached 950 million yuan, a significant increase from 265 million yuan in 2019. The company predicts that in the first half of 2021, revenue will be between 3.25 billion and 3.65 billion, and net profit will be between 570 million and 720 million, both with double-digit growth year-on-year.