Dongpeng Beverage's billion-yuan revenue cannot hide growth concerns

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“Sports drink” lost momentum, “hydrate” is hard to “hydrate”

Recently, Pneb饮料 released its 2025 annual report. Revenue came in at 20.88B yuan, with attributable net profit of 4.42B yuan. Both year-over-year growth rates exceeded 30%. The company has maintained rapid growth for seven consecutive years. This is Pneb饮料’s revenue for the first time surpassing the 20 billion yuan mark. Looking at Pneb饮料’s development history, it took nearly 30 years to grow from 0 to 10 billion yuan; but from 10 billion to 20 billion, it only took two years.

However, beneath the eye-catching financials, concerns have already begun to surface: Pneb饮料’s growth is increasingly dependent on channel rebates to drive it, while the raw-material cost dividend that previously supported high gross margins is gradually fading. Coupled with multiple factors—such as the narrowing of the window period caused by disputes within Red Bull, core product growth hitting a peak, channel pressure, and weakening cost advantages—near-term high growth cannot mask the deeper contradictions in the company’s long-term development.

1 Energy drinks first record single-digit growth

Based on full-year data, Pneb饮料’s 2025 performance is still impressive. The annual report shows that for the full year, the company achieved operating revenue of 20.88B yuan, up 31.80%; attributable net profit was 4.42B yuan, up 32.72%. The core product Pneb sports drink successfully entered the lineup of 15-billion-yuan major single products. Full-year revenue reached 15B yuan, up 17.25%. The electrolyte beverage “hydrate啦” generated full-year revenue of 15.6B yuan, up 118.99% year over year.

Although both Pneb饮料’s full-year revenue and attributable net profit growth rates exceeded 30% in 2025, the main product that supports the company’s “core base” — Pneb sports drink — is facing some growth challenges.

Breaking down the quarterly data, it can be seen that in 2025 Q4, Pneb sports drink’s revenue growth rate fell to single digits for the first time—only 8.5%, whereas the same period in 2024 saw 19.43% growth. This means the core engine that supported Pneb饮料’s high growth in recent years is clearly slowing down.

Looking back at Pneb饮料’s performance, its results have long depended on Pneb sports drink as the core single product. In the first three quarters of 2025, Pneb sports drink’s revenue share was still as high as 74.63%. Although this proportion has declined somewhat compared with prior years, the structural risk of relying on a single product has not fundamentally changed.

In fact, Pneb sports drink’s growth has already shown signs of fatigue, with the most prominent anomaly appearing in the fourth quarter. In that quarter, Pneb饮料’s revenue was 3.27B yuan, up 22.88% year over year, but down sharply 33.99% quarter over quarter. Net profit was 654 million yuan, down 52.80% quarter over quarter.

While the beverage industry does have clear seasonal characteristics, comparing historical data reveals a difference. In 2024 Q4, the quarter-over-quarter decline in net profit was 36.60%, with a year-over-year increase as high as 61.21%. In 2025, not only did the quarter-over-quarter decline expand substantially, the year-over-year growth rate of 5.66% also narrowed significantly, and growth momentum clearly slowed.

In reality, Pneb sports drink’s market share is already approaching 40%. For it to deliver rapid growth again would, by itself, defy common sense.

Previously, Pneb饮料 disclosed its 2026 operating target of “growth of no less than 20% in operating revenue.” Looking back, Pneb饮料’s revenue growth rate was 40.63% in 2023 and 31.80% in 2024. A 20% growth target implies that management has already proactively lowered its growth expectations.

In recent years, Pneb饮料 has worked to build a second growth curve, and its “1+6” brand matrix has focused on the electrolyte beverage “hydrate啦” as the key cultivation target, extending the beverage map into sub-segments such as fruit tea, tea with tea, baked tea, Harbor-style milk tea, big shot, sea-island coconut, and others.

In 2025, “hydrate啦” accounted for 15.70% of revenue—only about one-fifth of Pneb sports drink. This product launched in 2023 managed to sprint to a 3-billion-yuan scale within two years. It has remained second in the electrolyte water segment, with its size surpassing Baomineral Water—only behind the “Alien” under Nongqi Forest. But it is still not enough to help Pneb饮料 break away from reliance on major single products, and in the short term it also cannot fill the gap created by the core product’s slowdown.

At the same time, Pneb饮料’s gross margin is also a cause for concern. According to a research report by Southwest Securities, the gross margins of leading energy-drink companies are generally above 50%. But between 2022 and 2024, Pneb饮料’s core product gross margins were 43.26%, 45.35%, and 48.25%, respectively. Although gross margin gradually improved as revenue grew, because it follows a value-for-money route, its gross margin still remains below the average level of leading companies.

The financial report shows that the gross margin of electrolyte beverages and other new products is far lower than that of the core main business. In 2025, the gross margin of energy drinks was 50.79%, while the gross margin of electrolyte beverages was only 34.77%. Even if it increased by 5.05% compared with the prior year, there is still a 16% gap.

This means that the faster and larger the growth of the second curve and new products becomes, the more obvious the dilutive effect on the company’s overall profit margin will be in the future—one of the core reasons behind the decline in net profit margin in Q4 2025.

2 High growth in new categories drags down profitability

Upon carefully examining the structure of its diversification strategy, one issue stands out: other new products have not formed real support strength, aside from the electrolyte beverage line that stands out on its own.

More importantly, none of the new tracks the company has doubled down on are anything other than “red oceans” where giants already dominate and competition is fierce. In the electrolyte water space, strong brands such as Nongfu Spring’s “Jian叫” and Nongqi Forest’s “Alien” have already firmly established their foothold. In the ready-to-drink coffee segment, it faces full-scale compression from industry giants like Nestlé, Starbucks, and Master Kong. In the traditional tea drinks market, it has long been firmly controlled by Master Kong, Uni-President, and Nongfu Spring.

Although “Dapeng Daka,” its ready-to-drink coffee, has entered the top three in the industry, its share in total revenue remains limited. Although the plant-protein beverage “Sea-island Coconut” exceeded 10 million gift-box units in pickup volume during the 2026 Spring Festival, this performance is highly dependent on festive scenarios; its ability to sell day-to-day has not yet been validated. Fruit tea “Guo zhi cha” has moved into the 0.5-billion-yuan single-product tier, but it is still in its cultivation stage.

It is worth noting that while new categories are growing rapidly, they also— to a certain extent—drag down profitability performance.

To promote new categories, the company keeps increasing investment, which drives costs higher. It has投入 significant marketing resources in competitive segments such as electrolyte water and sugar-free tea. In 2025, Pneb饮料’s selling expenses increased by 27% year over year. Among them, advertising and promotions, channel promotion expenses, and refrigerator placement are especially noticeable.

In response, Pneb饮料 said that the increase in these expenses is mainly driven by channel promotion expenses and employee compensation costs. Among them, channel promotion expenses rose by 57.55%, mainly because the company increased its refrigerator investment during this period.

In Q4 2025, Pneb饮料, to lock in terminal resources during the off-season, placed a large number of refrigerators in advance—about 200 million yuan in this item alone. This directly pushed up the selling expense ratio and eroded profit space. This “front-loaded expenses” strategy is, in essence, “trading short-term profits for long-term market share.” Through early deployment, Pneb饮料 hopes to increase the sales performance at the terminal single points in 2026, thereby realizing higher profits.

Some analysts point out that Pneb饮料 is in a “green-and-yellow gap” stage—when “Pneb sports drink faces a growth bottleneck,” while the second curve can’t fill the decline in Pneb sports drink’s growth rate due to a low base. This structural contradiction may be the core concern the market has about the sustainability of the company’s future growth.

At the current stage, only the electrolyte water segment has achieved a phased breakthrough; the other new products have not been able to replicate Pneb sports drink’s disruptive competitive strength and channel barriers. Overall, they still mainly follow the market entry pattern and have not yet formed differentiated advantages, with their presence in market voice and market share still relatively weak.

Therefore, for Pneb饮料, the current product strategy faces a core dilemma. If it continues to increase investment in new products such as “hydrate啦,” it can maintain high growth, but it will continuously dilute profit margins. If it reduces investment, it can protect profits, but it may miss the opportunity for growth in the second curve and could even be overtaken by competitors.

Some analysts believe that, as Pneb饮料’s home base, the growth of the Guangdong market has already hit the ceiling. Data shows that in Q3 2025, the year-over-year growth in the Guangdong region was only 2%, and single-store revenue basically saw no growth.

Meanwhile, the ceiling for Pneb sports drink is getting closer. Its penetration rate in the 20–25 age group has reached 91%. But for electrolyte water, the repurchase rate in the same age group is only 17%. On the other hand, while the high-sugar and high-caffeine formulas meet the “stay alert” needs of blue-collar workers, they run counter to the health-oriented consumption trend, limiting expansion among younger consumers and urban residents.

In addition, in terms of R&D investment, in 2025 Pneb饮料’s R&D expenses were only 66 million yuan, up 5.85% year over year. But regardless of the expense scale or the growth rate, both are clearly lower than selling expenses.

Some analysts believe this path dependency of “heavy marketing, light R&D” may become a major hidden risk to the company’s long-term competitiveness.

3 On one side: high debt and high dividends. On the other side: shareholders heavily reduce their holdings

Zhang Xueji’s rise to fame with a motorcycle brought “a flood of luck and wealth” to sponsor Pneb饮料—but unfortunately, capital is not buying it.

The day after the annual report was released, Pneb饮料’s stock price suffered “cold treatment.” On March 31, the A-share stock saw a one-word limit-down. The Hong Kong-listed shares kept falling, and both valuations were sharply reduced. That day, Pneb饮料’s A-share opened lower and kept sliding; it fell more than 9% at one point, and the close was also a limit-down. The closing price was 205.27 yuan per share, down 9.97%, and total market value dropped to 115.9 billion yuan.

It is worth noting that the peak of Pneb饮料’s A-share stock price occurred in June 2025. At that time, the intraday price reached as high as 336.42 yuan per share. Compared with the peak, the current stock price has fallen by nearly 25%. As a result, the market value of the holdings of the actual controller, Lin Muqin, has also shrunk by more than 10 billion yuan.

Pneb饮料’s second pain point may be the contradiction between high debt and high dividends. The financial report shows that as of the end of 2025, the company’s total liabilities were 3B yuan, of which current liabilities were 500M yuan. Short-term borrowings were as high as 6.63 billion yuan. In the same period, the company’s current ratio and quick ratio were 0.97 and 0.83, respectively—both at relatively low levels—meaning the company faces significant short-term debt repayment pressure.

Against this backdrop, the company still maintains large-scale dividend payouts. In the past three years, the company’s cumulative cash dividends on A shares were 8.24B yuan. Meanwhile, its average attributable net profit over the past three years was 8.19B yuan, meaning the cash dividend payout ratio was as high as 184.39%.

What is also worth paying attention to is that since the lock-up period was lifted in 2022, multiple shareholders of Pneb饮料 have reduced their holdings intensively. The former second-largest shareholder, Junzheng Venture Capital, has completed four rounds of selling down, totaling cash proceeds of 6.01B yuan. The employee shareholding platforms, Pneb Yuan Dao, Pneb Zhi Yuan, and Pneb Zhi Cheng, reduced holdings through the secondary market, totaling 3.26B yuan. Yantai Kunpeng Investment Development Partnership Enterprise (Limited Partnership) sold down for about 4.15B yuan. These moves also, to a certain extent, increased investors’ doubts about the direction of the company’s business development.

Cash flow performance is also not encouraging. In 2025, Pneb饮料’s net cash flow from operating activities was 1.07B yuan, up 6.65% year over year—significantly lower than the 31.80% growth rate of revenue. For consumer goods companies, under a prepayment model, cash flow growth is typically expected to be higher than revenue growth, yet Pneb饮料 shows a “revenue growth without cash flow growth” divergence.

■ New Express Reporter Chen Fuxiang

【Source: New Express】