---
title: "Dongpeng Te Yin Nears IPO: Can the Ambitious Perennial Runner-Up Turn the Tables?"
description: "With the industry leader's 22.8 billion yuan in sales standing firm ahead and competitors like Lehu and Red Bull Anaji attacking from behind, can Dongpeng Te Yin carve out a larger share of the market? The perennial runner-up in the functional beverage sector has fully revealed its ambition. On June 10, Huatai United Securities disclosed Dongpeng Te Yin's plan: Dongpeng Beverages (Group) Co., Ltd. intends to conduct an initial public offering and list on a domestic stock exchange. The company confirmed its listing plans and is currently undergoing listing guidance."
author: "陈潇潇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-06-26"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/9Fbz5SE_yYEmjJf-2wYLhw"
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# Dongpeng Te Yin Nears IPO: Can the Ambitious Perennial Runner-Up Turn the Tables?

> With the industry leader's 22.8 billion yuan in sales standing firm ahead and competitors like Lehu and Red Bull Anaji attacking from behind, can Dongpeng Te Yin carve out a larger share of the market? The perennial runner-up in the functional beverage sector has fully revealed its ambition. On June 10, Huatai United Securities disclosed Dongpeng Te Yin's plan: Dongpeng Beverages (Group) Co., Ltd. intends to conduct an initial public offering and list on a domestic stock exchange. The company confirmed its listing plans and is currently undergoing listing guidance.

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With the industry leader's 22.8 billion yuan in sales standing firm ahead, and competitors like Lehu and Red Bull Anaji attacking from behind, can Dongpeng Te Yin carve out a larger share of the market?
**The perennial runner-up in the functional beverage sector has fully exposed its ambition this time.** On June 10, an announcement by Huatai United Securities revealed Dongpeng Te Yin's plan: Dongpeng Beverages (Group) Co., Ltd. intends to conduct an initial public offering and list on a domestic stock exchange.
**Dongpeng Beverages stated that it does have listing plans and is currently undergoing listing guidance, with the specific timeline to be planned by the guidance institution.**
The news immediately sparked widespread discussion in the industry. As a functional beverage brand that has been continuously booming in recent years, Dongpeng Te Yin's performance over the past two years has been remarkable. Founder Lin Muqin, low-key and strategically visionary, led Dongpeng Te Yin to achieve sales of 5 billion yuan in 2018.
Now, while the industry leader China Red Bull is mired in trademark disputes over equity and trademarks, Dongpeng Te Yin intends to have close contact with the capital market. What is its intention? What impact will this have on itself and the industry? What is the current progress of the IPO? What are the future expansion plans for its products? Regarding these questions, Investor.com called Dongpeng Te Yin's official website phone number, but no one answered.
**Dark Horse's Counterattack**
**Founded in 1987, Dongpeng Te Yin was originally a small state-owned factory in Shenzhen on the verge of bankruptcy.** In 2003, then-Sales General Manager Lin Muqin stepped forward and led the company to complete a shareholding system reform. Since then, Dongpeng Te Yin has seen a turning point, but for many years its development was limited to the South China region.
After Red Bull, a functional beverage from Thailand, entered China in 1995 and was sought after by the market, especially drivers, Lin Muqin also noticed the market opportunity for functional beverages. He decisively entered this market and engaged in differentiated competition with Red Bull, focusing on third- and fourth-tier markets.
In 2009, in the red ocean of canned functional beverages, bottled Dongpeng Te Yin entered the market and exploded in Dongguan. Subsequently, Lin Muqin increased advertising and promotional efforts, and sales in the Dongguan region quickly exceeded 100 million yuan. After thoroughly cultivating the Dongguan model market, Dongpeng Te Yin gradually expanded to other cities and regions.
**It can be said that for this 100 million yuan, Dongpeng Te Yin took a full 10 years.** Starting in 2013, Dongpeng Beverages entered the national market and gradually formed a basic national market layout with Shenzhen as the marketing planning center and six major business divisions: Guangdong, South China, East China, North China, Southwest, and Special Channels.
In 2016, while the industry leader China Red Bull was embroiled in a trademark dispute with Thailand's TCP Group and advertising was sharply reduced, Dongpeng Te Yin decisively upgraded its brand concept. In March 2017, Dongpeng Te Yin launched a new gold can product, began to take a fashionable route, and continuously sponsored variety shows such as "China Dream Show," "Happy Comedians," and "We Are Here." In 2018, it also replaced Red Bull in sponsoring the Chinese Super League and invested 165 million yuan in CCTV's World Cup coverage.
A series of actions led to explosive growth for Dongpeng Te Yin. Data shows that Dongpeng Te Yin's sales in 2016, 2017, and 2018 were over 3 billion yuan, over 4 billion yuan, and over 5 billion yuan, respectively, with a compound annual growth rate of nearly 30%. **The new slogan "Young and striving" has captured the hearts of young consumers.**
A small factory tucked away in South China, unknown to the public, has risen to second place in the industry after 32 years of development. Dongpeng Te Yin clearly carries the label of an underdog's counterattack.
**The Gap with the "Leader" Remains Significant**
According to data from China Commercial Industry Research Institute, retail sales of functional beverages in China exceeded 45 billion yuan in 2018. In the next five years, the functional beverage market is expected to have a compound annual growth rate of over 12%, indicating huge market space.
**However, with the entry of many brands, this market has long been a red ocean.** Especially after 2017, similar products have surged. According to data, nearly a hundred functional beverages have entered the market, including well-known ones like Monster, Carabao, By-Health F6, Hemp, and War Horse.
From the results, old brands are still market leaders, and new entrants find it difficult to make a mark in a short time. Currently, besides Red Bull and Dongpeng Te Yin, Dali's Lehu holds the third position with sales exceeding 3 billion yuan in 2018. Following closely is Zhongwo Tizhi Nengliang, whose 2018 sales were not disclosed, but the brand's sales exceeded 1 billion yuan in 2014 and have been growing at a rate of 20-30% annually, so its strength cannot be ignored.
Facing the situation of **"Red Bull blocking the front, and new wolves chasing from behind,"** Dongpeng Te Yin has adopted measures such as increasing advertising and marketing, poaching talent from competitor JDB, and lowering prices to maintain its growth momentum as the dark horse runner-up. However, it cannot be ignored that **Dongpeng Te Yin still cannot be compared with Red Bull in terms of sales volume and market share.**
From the perspective of brand influence and channels, apart from its stronghold in South China, Dongpeng Te Yin's recognition in the northern market remains low. Taking Beijing as an example, Dongpeng Te Yin is not seen in major offline retail outlets such as Carrefour, Yonghui Superstores, and 7-ELEVEn.
In order to win the northern market, Dongpeng Te Yin's "low-price strategy" has not worked. Investor.com found that on e-commerce platforms, the price of 250ml bottled Dongpeng Te Yin and canned Dongpeng Te Yin is about 3 yuan per bottle, while Red Bull is priced at 5.8 yuan per can. This "low-price strategy" puts pressure on distributors, and it will be difficult to achieve results if this method is implemented again in the short term.
In this regard, Zhu Danpeng, an analyst at China Food Industry, believes that Dongpeng Te Yin still has its own core competitiveness, especially in the South China market and third-, fourth-, and fifth-tier markets, but its products have not fully penetrated the northern market.
He also said, **"Although Dongpeng Te Yin achieved sales revenue of 5 billion yuan in 2018, compared with the industry leader Red Bull's 22.68 billion yuan in sales in 2018, the gap is still significant."**
**Can It Turn the Tables?**
Despite the obstacles in expanding northward, Dongpeng Te Yin's ambition for market expansion remains undiminished. Coupled with the crisis of the industry leader, what Dongpeng Te Yin wants to change seems to be its position as the perennial runner-up.
On June 10, Huatai United Securities issued an announcement on the filing information for Dongpeng Te Yin's initial public offering and listing guidance. The announcement stated that Dongpeng Beverages intends to conduct an initial public offering and list on a domestic stock exchange. It has now accepted guidance from Huatai United Securities and filed for guidance with the Shenzhen Securities Regulatory Bureau on May 24, 2019.
In this regard, industry insiders believe that accepting listing guidance does not mean it will go public. Many food and beverage companies have accepted listing guidance but ultimately did not list. The most typical example is Nongfu Spring, which received guidance for 10 years but ultimately abandoned its listing plan on the grounds that it did not lack funds.
Dongpeng Te Yin recently also publicly stated that it will first strengthen its internal capabilities, and there is currently no timetable for listing. Despite this, speculation in the industry about its imminent IPO has greatly increased.
Zhu Danpeng analyzed, **"This move can be said to expose Dongpeng Te Yin's ambition. Although Dongpeng Te Yin already has a certain say in the functional beverage market, to consolidate its foundation and expand into more markets, it must leverage the power of capital, develop multi-brand strategies, and solve the problem of product singularity. This is the core reason for Dongpeng Te Yin's listing."**
In fact, this is not the first time Dongpeng Te Yin has connected with capital. As early as 2017, it accepted a strategic investment of 350 million yuan from Jiahua Capital (formerly Jiahua Weiye), an equity fund that has invested in companies such as Xiaoguan Tea, Didi Chuxing, Qiaqia Food, and Lai Yifen.
In addition, data from Qichacha shows that the top three shareholders of Dongpeng Beverages are Lin Muqin holding 56.85%, Tianjin Junzheng Investment Management Partnership (Limited Partnership) holding 10%, and Shenzhen Kunpeng Investment Development Partnership (Limited Partnership) holding 7.36%.
Industry insiders say that Dongpeng Te Yin, with a relatively simple shareholder structure, may have a higher chance of passing the listing review.
Once Dongpeng Te Yin's IPO succeeds, the impact on the industry leader remains unknown. At present, the situation seems unfavorable: China Red Bull's market share has not yet been eroded, and a new competitor, Thai Red Bull, has emerged.
The latest news shows that although the lawsuit between China Red Bull and Thailand's TCP Group is still in the trial process, TCP Group has not been idle. It had earlier cooperated with domestic beverage companies to develop Red Bull Anaji functional beverage. On June 12, TCP Group and the Xu family announced on their official WeChat account that Red Bull Anaji was launched in the Chinese market.
It is reported that Red Bull Anaji currently has an annual production capacity of about 6 billion yuan and recruited over 200 distributors last year to expand channels. Facing such a situation, **whether Dongpeng Te Yin, a regional brand that has endured for many years and hopes to stand out, can have the opportunity to turn the tables will depend on its own changes and the industry's evolution in the future.**
Source: Investor.com


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