Source: LeiDi (Reported by Lei Jianping)

Eastroc Beverage (09980.HK / 605499.SH) officially made its debut on the Hong Kong Stock Exchange yesterday. The IPO raised a total of HKD 10.1 billion, with net proceeds reaching HKD 9.994 billion, setting a new fundraising record for Asia’s beverage industry.

As Eastroc Beverage’s earliest — and at the time, only — external institutional investor, Harvest Capital has witnessed and supported the company’s growth from the very beginning. At this H-share listing, Harvest Capital further increased its stake by participating as both an anchor investor and cornerstone investor. Alan Song Xiangqian, Founder and Chairman of Harvest Capital, was also invited to attend the listing ceremony.

In an interview, Song noted that Eastroc Beverage is a rare company that has long been undervalued by the market yet continues to deliver surprises. In his view, Eastroc’s rise represents a triumph over entrenched bias: even in the highly competitive functional beverage category, disciplined, pragmatic innovation can still carve out new growth space. This Hong Kong listing, he said, is not merely an investment success, but a victory for long-termism in China’s consumer sector.

1. Vision: Competing Head-on with Red Bull on the Global Stage Within Five Years

Founded in 1994, Eastroc Beverage focuses on functional beverages. Its flagship product, Eastroc Energy Drink, has grown into a phenomenon with annual retail sales exceeding RMB 10 billion in China. The brand slogan — “Tired or sleepy? Drink Eastroc Energy Drink” — has become deeply embedded in the national consciousness, fueling long-haul truck drivers, delivery couriers, and white-collar workers alike.

Today, Eastroc has built a diversified portfolio spanning energy drinks, sports drinks, ready-to-drink teas, coffee, and plant-based protein beverages.

The company’s confidence in going public is underpinned by an exceptionally robust growth trajectory. In the first three quarters of 2025, Eastroc reported revenue of RMB 16.84 billion, up 34.13% year-on-year, with net profit attributable to shareholders reaching RMB 3.761 billion, a 38.91% increase.

For full-year 2025, Eastroc expects revenue of RMB 20.76–21.12 billion, representing a year-on-year increase of RMB 4.92–5.28 billion, or 31.07%–33.34%. Net profit attributable to shareholders is projected at RMB 4.34–4.59 billion, up 30.46%–37.97%.

Based on this momentum, Song forecasts that Eastroc could achieve annual net profits of RMB 7.5–8.0 billion within three years, becoming the second benchmark in China’s beverage industry after Nongfu Spring. He firmly believes that within five years, Eastroc will be capable of competing head-to-head on a global scale with international giants such as Red Bull and Monster.

2. Core Moat: Extreme Localization and a Digital Efficiency Revolution

According to Song, in 2025 Eastroc has already surpassed Red Bull China in growth rate, market share expansion, and sales performance over the past two years. Its success, he emphasized, is no accident.

Precise consumer positioning.

Unlike Red Bull’s traditional focus on extreme sports enthusiasts and urban elites, Eastroc targeted China’s vast base of everyday strivers: food delivery riders, couriers, truck drivers, late-night office workers, and young consumers. This positioning aligns squarely with China’s mass-market, high-frequency consumption demand.

The “digital code.”

Eastroc has mastered the core capability of modern beverage companies: using digitalization to reshape its distribution system and value-sharing mechanism. Marketing expenses are delivered directly to terminals, while strong sell-through drives the construction and reinforcement of the distribution network. At the same time, Eastroc achieves precise engagement with end consumers and real-time control of digital assets across the entire value chain. This full-scale shift to data-driven operations has fundamentally improved efficiency. With a gross margin of under 47%, Eastroc delivers an ROE exceeding 45% — even higher than some ultra-high-margin companies such as Kweichow Moutai. This is a true efficiency revolution born from the fusion of business insight and digitalization.

Managerial resilience.

Song describes Eastroc founder Lin Muqin as “the most innovative entrepreneur in China’s beverage industry.” Lin’s extreme pragmatism, strategic clarity, and precise focus on priorities are, in Song’s view, the cornerstone of Eastroc’s systematic success.

3. Breaking the “Unsophisticated” Bias: Pragmatism as the Highest Form of Sophistication

Harvest Capital’s partnership with Eastroc stems from a shared belief in the logic of “high-frequency, addictive, category-defining products.” In 2017, Harvest invested RMB 350 million in Eastroc, becoming its second-largest shareholder and the only external institutional investor at the time — an investment that later generated outsized returns.

With Eastroc’s Hong Kong listing, Harvest Capital continues its support as an anchor and cornerstone investor. Song stated that Eastroc’s “A+H” dual listing represents a declaration of Chinese functional beverages stepping onto the global stage.

“As Eastroc’s cornerstone investor, Harvest will continue to be the ‘champion behind the champion,’ supporting Eastroc as it spreads its wings across broader global markets. We firmly believe that the globalization of Chinese brands is not merely about exporting products, but about exporting value chains and management philosophy. Today, we witness history; tomorrow, we will write new chapters together with Eastroc.”

For years, Eastroc was subject to widespread misinterpretation. The brand was often labeled as “unsophisticated,” and founder Lin Muqin’s low-profile style led some to believe the company lacked international flair.

Song sees this as a profound business illusion. “When I first met Lin and his team, their office and demeanor were extremely modest and grounded — none of the superficial corporate theatrics. What I saw instead was a team deeply rooted in the frontline and intensely focused on the market.”

“Many people underestimate them because of this external simplicity. But once you look beneath the surface, their understanding of product refinement, channel penetration, and digitalization is extraordinarily deep. This ‘de-glamorized’ pragmatism is, in fact, the highest form of Chinese business wisdom,” Song said.

4. Being the Champion Behind the Champion, the Brand Behind the Brand

The H-share listing marks a rallying call for Eastroc’s globalization drive. The company aims not only to be China’s Eastroc, but to grow into a global comprehensive beverage group akin to Coca-Cola or Suntory.

Looking back, Eastroc’s history is essentially a story of breaking out from underestimation. Song recalled: “At the time, the Red Bull team did not view Eastroc as a serious competitor. When I went for due diligence, they believed this rival would never make it. But investment is ultimately a battle of cognition. Only by stripping away noise, engaging deeply and rationally with the team, and observing the smallest details can true value be discovered amid prejudice.”

In Song’s view, great investors must be exceptional observers. Approaching teams with empathy and resonating with them through the journey of dreaming, pursuing, and realizing ambitions is both meaningful and rewarding.

“I’ve genuinely enjoyed this journey. Over the ten years we’ve run alongside Eastroc, one sentence from Lin has stayed with me: ‘Eastroc is a company with ideals.’ We look forward to seeing Eastroc inject Chinese energy into the world — and watching the Eastern Roc soar across the globe.”