09980.HK 2Q26 First Take: Overall, Dongpeng Beverage's Q2 remained weak, the kind of print Dolphin Research least wants to see — topline clearly losing steam, while profit looks decent on cost tailwinds.
Notably, in the interim report management for the first time said core categories such as energy drinks and electrolyte drinks have entered a fully competitive stage, a fresh confirmation that the high-growth phase is over for a company used to rapid expansion over the past five years. $EASTROC BEVERAGE(605499.SH) $EASTROC(09980.HK)
By category, energy drinks delivered RMB 4.52 bn in single-quarter revenue, up just 1.4% YoY, a cliff-like slowdown.
Back-solving from shipments suggests Q2 volume growth was near zero or negative, exactly the bottleneck effect Dolphin Research has repeatedly flagged now showing up in the P&L.The second growth curve, 'Dongpeng Bǔshuǐ La' (hydration), posted approx. RMB 1.03 bn for the quarter, +11.2% YoY, with momentum also fading QoQ. Management attributed this to El Niño-driven extreme rainfall and abnormal temperatures disrupting outdoor and on-the-go consumption; weather explains part of it, but two straight quarters of only mid-teens growth looks more like hand-to-hand competition intensifying in the category.
The only bright spot remains tea and other drinks, totaling approx. RMB 90 mn for the quarter, +97% YoY. However, with GPM at just 24%, the profit contribution to the group is limited.
By region, South China (Guangdong, Hainan, HK & Macau) delivered RMB 3.18 bn in H1, up only 2.9% YoY, indicating stagnation in the home turf.
In East and North China, Q2 growth slipped to single digits.Central (+20.5%) and West (+19.5%) were relatively steady. Underneath, the national rollout dividend is narrowing; incremental gains now depend on per-outlet productivity across 4.6 mn active terminals, not further network expansion.
On profitability, benefiting from Q1 locked-in pricing on PET and other key inputs, Q2 GPM expanded 400 bps YoY to 50%, beating expectations.
With peak-season channel investments (notably more smart freezer placements) and stepped-up advertising, the selling expense ratio rose 240 bps YoY to 17.2%.Core OPM improved only 100 bps to 29.5%.
In short, spend went up, but growth did not come through.
