Dongpeng Beverage 2025 Annual Report Analysis: Revenue up 31.80% to 20.875 billion yuan; Cash flow from financing activities plummeted 275.66%

Interpretation of Core Profitability Indicators

Operating Revenue

In 2025, EAPEN Beverage achieved operating revenue of RMB 20.875 billion, up 31.80% year over year. For the first time, its revenue scale surpassed the RMB 20 billion mark. Judging from the revenue composition, the domestic market contributed RMB 20.855 billion, accounting for 99.91%, which is the core pillar supporting revenue growth; the overseas market contributed only RMB 0.20 billion, accounting for 0.09%, and the internationalization business is still at an initial stage. By region, the North China battle zone’s revenue surged 67.86% year over year, while the West China battle zone grew 40.77%, becoming the main driving force behind the national layout; as the company’s traditional core market, the South China battle zone saw revenue growth of 18.09%, with a relatively steady growth rate, and the continued improvement in the balance of the company’s nationwide market layout.

Net Profit

Net profit attributable to shareholders of listed companies was RMB 4.415 billion, up 32.72% year over year. The growth rate is slightly higher than the revenue growth rate, showing the company’s ongoing improvement in profitability quality. The increase in net profit mainly comes from appropriate cost control under scale effects, as well as a higher proportion of high-gross-margin products.

Net Profit After Non-Recurring Items

Net profit after deducting non-recurring gains and losses was RMB 4.184 billion, up 28.26% year over year. The growth rate is lower than the net profit growth rate, mainly because non-recurring gains and losses during the period reached RMB 0.231 billion, of which fair value changes and disposal gains from financial assets held by non-financial enterprises contributed RMB 0.190 billion, providing some support to net profit growth.

Basic Earnings Per Share (EPS)

Basic EPS was RMB 8.4907 per share, up 32.72% year over year, fully matching the net profit growth rate, reflecting that the company’s earnings growth is directly transmitted to shareholders.

Net Profit After Non-Recurring EPS

EPS after deducting non-recurring items was RMB 8.0463 per share, up 28.26% year over year, consistent with the growth rate of net profit after deducting non-recurring items. After removing non-recurring gains and losses, the company’s core earnings growth rate remains at a relatively high level.

Analysis of Period Expenses

Overall Expense Situation

Total period expenses in 2025 were RMB 3.948 billion, with a period expense ratio of 18.91%. Compared with the prior year, it increased slightly by 0.09 percentage points. Overall, expense management remained stable.

Selling Expenses

Selling expenses were RMB 340.5 million, up 27.00% year over year. The growth rate was lower than the revenue growth rate. The selling expense ratio declined by 0.62 percentage points compared with last year, indicating improved spending efficiency. Growth mainly came from two aspects: first, year-over-year growth in channel promotion expenses by 57.55%, mainly because the company increased investment in end-market equipment such as ice cabinets to strengthen market penetration; second, staff compensation increased by 23.04%, driven by the expansion of the sales personnel scale as the nationwide strategy advanced.

Administrative Expenses

Administrative expenses were RMB 57.7 million, up 35.53% year over year. The increase was mainly due to higher compensation for management personnel, increased depreciation and amortization expenses, and higher intermediary service fees. The company’s listings in both A+H markets and its nationwide layout increased administrative costs.

Financial Expenses

Financial expenses were -RMB 100 million, decreasing by RMB 90.622 million year over year. This was mainly due to a decline in interest income from time deposits. At the end of the period, the company held RMB 5.680 billion in cash and cash equivalents, still maintaining a relatively high cash reserve, and interest income remained considerable.

R&D Expenses

R&D expenses were RMB 66.3384 million, up 5.85% year over year, and the R&D expense ratio decreased by 0.08 percentage points. R&D investment was mainly used for product formula upgrades and process optimization. During the reporting period, the company introduced new products aligned with health-focused and functional directions, such as sugar-free energy drinks and stronger taurine energy drinks, providing support for expanding its product portfolio.

R&D Personnel Situation

The scale of the company’s R&D team remained stable. Core R&D personnel focused on research into beverage formulas, processes, and health benefits. Through collaboration among production, education, and research, the company advanced basic research on tea and coconut juice quality and explored HPP cutting-edge processes. In 2025, R&D output was significant: multiple new products were launched, and the conversion rate of R&D investment continued to improve, laying a foundation for product innovation and market competitiveness.

Cash Flow Analysis

Overall Cash Flow Situation

In 2025, the company’s net decrease in cash and cash equivalents was RMB 587 million, mainly due to significant cash outflows from investing activities and large cash outflows from financing activities.

Net Cash Flow from Operating Activities

Net cash flow from operating activities was RMB 6.174 billion, up 6.65% year over year. This was mainly because cash received from the sale of goods increased to RMB 25.122 billion, matching revenue growth. Operating cash flow continued to record net inflows, indicating that the company’s main business has strong cash generation ability and that cash flow quality is relatively high.

Net Cash Flow from Investing Activities

Net cash flow from investing activities was -RMB 4.102 billion. The scale of net outflows narrowed by 40.33% year over year, mainly because cash received from the return of investments increased to RMB 23.632 billion. During the full year, the company’s cash outflows from investing activities were RMB 27.996 billion, mainly used for purchasing large-denomination time deposits, wealth management products, and fixed-asset construction. The company continues to allocate capital toward long-term capacity and financial assets to improve returns on funds.

Net Cash Flow from Financing Activities

Net cash flow from financing activities was -RMB 2.648 billion. Compared with last year, it shifted from net inflow to a large net outflow. This was mainly because the company repaid debt with cash of RMB 9.225 billion, up 53.46% year over year. Meanwhile, dividends and profit payments totaled RMB 2.678 billion. As the company increased both debt repayment力度 and the scale of dividend distributions, financing cash flow was put under significant pressure.

Risks the Company May Face

Product Quality and Food Safety Risk

Although the company has built a full-chain quality management and control system, with rising consumer awareness of food safety and the amplification effect of social media transmission, any quality issues could trigger a crisis of brand trust and have a major impact on operations.

Risk of Raw Material Price Volatility

PET packaging material and white sugar account for a relatively high proportion of costs. The prices of these two raw materials fluctuate significantly due to factors such as international oil prices and agricultural product cycles. Although the company has taken measures such as strategic price locking, it may still face the risk that a sharp rise in raw material prices will put pressure on costs.

Market Competition Risk

Competition in the beverage industry is fierce, and international leading brands and emerging domestic brands are engaging on multiple fronts. If competition intensifies in the future and triggers a price war, it would have an adverse impact on the company’s gross margin and market expansion.

Risk of Regulatory Policy Changes

Regulation in the food and beverage industry is becoming stricter, with industry laws and standards continuing to be refined. If the company cannot adapt to regulatory changes in a timely manner, it will face higher compliance costs and pressure to adjust its operations.

Executive Compensation

Chairman Lin Muqin’s pre-tax compensation during the reporting period was RMB 5.3161 million. CEO Lin Mugang’s pre-tax compensation was RMB 4.3784 million. The compensation of the two core executives is linked to the company’s performance growth, reflecting that management interests are tied to shareholders’ interests. Vice Presidents Lu Yifu and Jiang Weiyi’s pre-tax compensation was RMB 4.1134 million and RMB 4.2850 million, respectively. Financial Controller Peng Dexin’s pre-tax compensation was RMB 2.0569 million. The executive compensation system maintains competitiveness while also matching the company’s scale and industry level.

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Responsible editor: Xiao Lang Express