The following article is sourced from KuaiXiao, authored by KuaiXiao Jun 

On April 24, the China Securities Regulatory Commission (CSRC) disclosed the initial public offering (IPO) prospectus of **Eastroc Beverage**. Compared to the volatile paths of other beverage companies, Eastroc Beverage’s journey has been notably swift—just ten months passed from receiving listing guidance in June 2019 to the prospectus pre‑disclosure in April 2020.

Why has Eastroc Beverage’s IPO process proceeded so smoothly? Much of the credit goes to its flagship product: the functional beverage **Eastroc Special Drink**. In recent years, functional drinks have been the fastest‑growing category in the beverage industry after packaged water, and the market pie continues to expand. Today’s functional beverage landscape is increasingly dynamic, yet Eastroc Special Drink has remained a steady and resilient player through the shifts. Given its strong market position and consistent performance, Eastroc Beverage is widely seen as the clear front‑runner to become **China’s first listed functional‑beverage company**.

01 Patience and Ambition: The Eastroc Beverage Way

Anyone who has played the card game *Fight the Landlord* knows that the most feared opponents aren’t those who play aggressively from the start. Rather, it’s the player who quietly holds back, waiting until you think you’ve secured victory, then says “wait” and lays down a winning combination you never saw coming.

“You know, that chrysanthemum tea product only earned 2–3 cents profit per box—and we sold it for seven years,” Eastroc Beverage Chairman **Lin Muqin** once remarked in an interview, referring to the drink that launched the company.

It’s this low‑margin, no‑room‑for‑error beginning that shaped Lin Muqin’s cautious, meticulous approach. Yet that same caution has also sharpened his ability to recognize opportunity—and when opportunity arises, Eastroc Beverage never lets it slip.

That’s why we’ve seen Eastroc’s consistent style in recent years: no matter how promising a product, it is first tested in a model market until proven, then rolled out region by region. This explains why Eastroc Special Drink first reached ¥100 million in sales in Dongguan before expanding across Guangdong, and only after stabilizing the Guangdong market did it move into other provinces. The same strategy applies to its newer **Citrus Lemon Tea**: after a successful pilot in Guangdong last year, the company moved swiftly to sign top actress Yang Zi as brand ambassador—a process that took just over six months, compared to the longer timeline when Eastroc Special Drink first engaged Nicholas Tse. This speed reflects both Eastroc’s confidence in the new product and its stronger market footing today.

When the moment is right, Eastroc acts with decisive ambition. From selling chrysanthemum tea for seven years, to pivoting to functional drinks, to pioneering bottled functional beverages, and now sprinting toward an IPO, Lin Muqin and his team have consistently seized the right opportunities at the right time.

Interestingly, two major beverage companies are pursuing IPOs this year. The well‑known **Nongfu Spring** started its process earlier than Eastroc Beverage, but its path has been more protracted—almost like a corporate spy drama. Since 2008, Nongfu Spring underwent a decade of listing preparation, missing several windows before finally applying for a Hong Kong listing in early 2020, all while maintaining a stance of “no comment.”

Some may think a company goes public because it “needs money,” but as Nongfu Spring demonstrates, that’s not necessarily the case. Behind every listing lies strategic intent. For Eastroc Beverage, if Red Bull hadn’t encountered trademark disputes, Eastroc might have remained content as the industry’s steady number two. But given Red Bull’s current uncertainties, the market has opened a tantalizing window of opportunity. Seizing this once‑in‑a‑generation chance through an IPO to accelerate growth is a natural—and timely—move.

Dreams are worth having, and people are often willing to support those who pursue them. That’s why Red Bull’s Yan Bin early on reminded his team: “Eastroc Special Drink is the real competitor.”

02 Market Shifts Create Greater Potential

Lin Muqin is a patient leader—and one who knows how to seize an opening when it appears. The ongoing trademark battle between Huabin Red Bull and T.C. Pharmaceutical Red Bull has created uncertainty in the functional‑beverage market, widening the runway for other players. T.C. Pharmaceutical, despite holding the original trademark, has faced reported friction with its distributor Pusheng, sparking rumors of a potential switch to the **Uni‑President Group**. Meanwhile, Huabin Red Bull’s dealer network and sales team have shown signs of instability, with some even quietly shifting toward T.C. Pharmaceutical’s product.

What’s more, T.C. Pharmaceutical has begun importing a Thai‑formula Red Bull that many say tastes closer to the original—and better than the current Huabin version. As the legal and market battle between these two drags on, Eastroc Special Drink enjoys a golden development window. Every lawsuit or dispute between the rivals further fuels Eastroc’s growth.

Additionally, **Vita Lemon Tea**, long known for its stability, has faced rumors of internal issues and dealer stock‑clearance—opening a door for Eastroc’s new Citrus Lemon Tea.

The convergence of a strong two‑product portfolio with market volatility and leadership crises gives Eastroc Beverage exceptional opportunities. Its future market valuation naturally holds substantial upside.

IPOs typically take time to complete. If Eastroc Beverage’s process stays on track this year, a 2021 listing is highly likely. As China’s “first functional‑beverage stock,” it’s worth looking at the example of **Monster Beverage** in the U.S. After launching in 2002, Monster (then Hansen Natural Beverage) became one of the fastest‑growing companies in its sector, with stock price soaring 690% over a decade and capturing 52.8% of the U.S. energy‑drink market by 2015, surpassing Red Bull and reaching a market cap exceeding $100 billion.

Among A‑share beverage peers, Eastroc Beverage’s prospectus benchmarks against **Xiangpiaopiao** and **Yangyuan Beverage** (“Six Walnuts”). Before listing, Xiangpiaopiao reported revenue of ¥2.4 billion (pre‑tax) with a 40.20% gross margin and a market cap of ¥8.1 billion. Yangyuan Beverage posted pre‑tax revenue of ¥8.9 billion, a 47.85% gross margin, and a market cap of ¥61 billion. Eastroc Beverage’s 2019 gross margin was 46.74%. Though revenue is lower than Yangyuan’s, Eastroc has shown steady annual sales growth. A conservative estimate places its post‑listing market cap around ¥20 billion, with potential to reach ¥30 billion.

03 Reshaping the Functional‑Beverage Landscape

It is reported that in 2019, Eastroc Special Drink shipped 2.4 billion units (840,000 tons)—nearly three‑quarters of Red Bull’s annual volume. While revenue gap between the two remains wide, the difference in actual volume consumed is narrowing year by year. The 500ml bottle now accounts for a significant portion of Eastroc’s sales, and notably, one 500ml bottle equals two cans of Red Bull in volume. The 500ml format has been one of Eastroc’s most successful moves in recent years—remarkably, the nationwide switch and rollout took only about two years. Combined with promotional campaigns like “add one yuan, get one more,” the large‑bottle segment is poised for continued strong growth.

In Europe and the U.S., energy drinks are predominantly canned, but in China, overall beverage consumption still favors bottles—easier to drink, carry, and reseal. Major beverage groups like **Nongfu Spring**, **Master Kong**, and **Wahaha** all lead with bottled products, which still dominate the broader market.

Thus, although Red Bull introduced the 250ml can to China and built early consumer recognition, it couldn’t stop Eastroc Special Drink from entering via bottles and quickly carving out a share. This success stems from insight into local drinking habits—meeting an unmet need and gaining a firm foothold. Eastroc’s canned line has faced a tougher path, given Red Bull’s entrenched presence. Pragmatically, Eastroc adapted, switching from three‑piece to two‑piece cans, pricing at ¥4 retail, and focusing on the gift‑box market (e.g., 20‑can packs) while promoting multi‑can bundles in modern and traditional channels. Through tactics like “add one yuan for an extra can” and bottle‑can linkage promotions, Eastroc is making strategic inroads in the canned segment.

On the branding front, Red Bull has not aired major advertisements for over three years due to its trademark disputes—creating a clear opening for Eastroc to build brand equity. Eastroc has seized the moment: from World Cup sponsorships and two‑season backing of the Chinese Super League, to frequent TV drama placements and ongoing variety‑show partnerships, across long‑form and short‑form video—Eastroc Special Drink continues to invest heavily in brand building. Slogans like “Stay awake and strive when young” and “Drink Eastroc Special Drink when tired or sleepy” are gradually taking root.

04 The First Functional‑Beverage Stock: A Future Full of Promise

In recent years, the FMCG market has generally been flat, and listed beverage companies have faced various headwinds. As China’s first functional‑beverage stock, can Eastroc Beverage truly bring the “refreshing, anti‑fatigue” boost the industry and capital markets are looking for?

Challenges are what make the game exciting. Miracles are always worth anticipating. We are eager to see the functional‑beverage landscape reshaped. Eastroc Beverage already holds a strong hand in this “Fight the Landlord” card game. Now, let’s see what new moves the first functional‑beverage stock can play.