Article source: Food Plate (tyjspb)

On April 24, the prospectus of Eastroc Beverage (Group) Co., Ltd. was disclosed on the official website of the China Securities Regulatory Commission, revealing the company’s financial performance over the past three years. In 2019, Eastroc Beverage achieved operating income of ¥4.209 billion (excluding tax), with its 500ml large‑bottle “Eastroc Special Drink” emerging as the top revenue‑generating SKU—sales surged 170% year‑on‑year, contributing nearly ¥2.2 billion.

As a dedicated, low‑profile Chaoshan entrepreneur, Chairman Lin Muqin has spent three decades in the beverage industry, steadily guiding Eastroc Beverage to become a national leader in energy drinks. Now, the company stands just one step away from entering the capital market.

Four Leaps of Eastroc Special Drink

“Without Eastroc Special Drink, there would be no Eastroc Beverage today.” Under Chairman Lin Muqin’s leadership, Eastroc Special Drink now ranks among the top two players in China’s energy‑drink sector. The brand’s ability to consistently seize market opportunities stems from Lin’s strategic insight and decisive execution.

1. Breakthrough in Bottle Packaging
In 2009, Eastroc Special Drink introduced distinctive bottled packaging. In a market dominated by Red Bull’s cans, this move created differentiated price and packaging advantages, meeting a broad consumer demand for functional beverages.

2. Celebrity Endorsement Boosts Brand Recognition 
After establishing a strong foothold in Guangdong, Eastroc Special Drink signed actor Nicholas Tse as its brand ambassador in 2013, accelerating its expansion into other provinces and gaining nationwide popularity.

3. Scan‑Code Marketing Creates a Phenomenon 
Among fast‑moving consumer goods companies, Eastroc Beverage was an early adopter of digital marketing. It pioneered the use of QR‑code scanning on bottle caps, riding the wave of WeChat scan‑code engagement to fuel another surge in brand growth.

4. Brand Rejuvenation Captures Young Consumers  
In 2016, Eastroc Special Drink launched a brand‑rejuvenation strategy under the slogan “Young People, Stay Awake and Strive.” Innovative internet‑style advertisements, coupled with placements in hit TV dramas and variety shows, helped the brand break through and win the hearts of countless young consumers.

The Large‑Bottle Advantage

Eastroc Special Drink’s expansion beyond its southern base initially faced challenges. Despite advertising and channel investments, sales in northern markets lagged. After thorough research, Lin Muqin identified significant cultural and lifestyle differences between north and south China: the smaller bottles popular in Guangdong were less appealing in the north. In response, the company launched a 500ml “free‑drink” bottle in 2017, generating nearly ¥60 million in revenue that year.

By 2018, sales of the 500ml large bottle nearly doubled to ¥799 million, then soared 170% in 2019 to approximately ¥2.167 billion, becoming the primary driver of Eastroc Beverage’s revenue growth. The rise of the large‑bottle format has also helped Eastroc Special Drink rapidly close the volume gap with Red Bull—after all, one large bottle equals two cans of Red Bull. While revenue differences between the two brands remain substantial, the gap in actual consumer consumption volume has narrowed significantly.

Additionally, the 250ml gold can introduced in 2017 saw major optimizations after switching from three‑piece to two‑piece can technology, improving cost and retail pricing. The product gained traction in the Chinese New Year gift market in 2018 and 2019, generating nearly ¥538 million in revenue last year and maintaining a steady upward trend.

Supported by the large bottle and gold can, Eastroc Special Drink’s total revenue reached ¥4.003 billion in 2019, accounting for over 95% of the company’s total revenue. The product portfolio now includes 250ml gold brick, 250ml gold bottle, 250ml gold can, and 500ml gold bottle formats, with suggested retail prices of ¥2/box, ¥3/bottle, ¥4/can, and ¥5/bottle respectively. As regional expansion, production capacity, and product matrices continue to mature, Eastroc Special Drink still holds considerable untapped potential.

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IPO to Fuel Accelerated Expansion

“There is absolutely room. For energy drinks, annual sales of ¥10 billion are achievable.” Lin Muqin’s confidence stems not only from the brand’s strengths, but also from his macro‑level understanding of the category.

Data show that while energy drinks entered the Chinese market relatively late, growth has been rapid. In 2019, China’s energy‑drink market reached ¥42.775 billion in total sales, with off‑premise consumption posting a six‑year CAGR of 15.02%—making it one of the fastest‑growing beverage segments.

In terms of per‑capita consumption, data compiled by Euromonitor International and CICC Research indicate that in 2017, mainland China’s per‑capita consumption of functional beverages was 2.2 liters (US$6.20 in value), less than half that of Hong Kong and far below levels in the UK, Japan, and the United States. With substantial room for per‑capita growth and increasingly diverse consumption occasions, the domestic energy‑drink market holds vast potential.

Eastroc Special Drink has achieved deep penetration in Guangdong, where its sales volume leads the industry. However, this strong regional focus initially led to an imbalance in resource allocation. It was only in the second half of 2017 that the company began focusing on the northern market with the 500ml format, accelerating its national expansion in recent years. Today, Eastroc is actively exploring markets in Guangxi, Central China, and East China, with a sales network covering nearly 1 million retail outlets nationwide. The proportion of revenue from Guangdong is gradually declining as the brand enters a new development phase with clear goals: to strengthen channel management, expand into more markets, and increase its market share and brand influence in energy drinks.

According to the prospectus, Eastroc plans to further expand production capacity in South China to meet growing demand. Simultaneously, it intends to build a production base in Chongqing’s Xipeng area to better serve the central and western markets—shortening delivery distances, reducing logistics costs, and optimizing the national production footprint.

Adding a “Breakout Star” to Seize New Opportunities

Although Eastroc Special Drink remains the standout performer, Lin Muqin has never stopped exploring other categories. In the early years after taking over the company, he spent seven challenging years building the chrysanthemum tea business. To enhance market competitiveness and broaden its consumer base, Eastroc Beverage has continued to enrich its product lineup, relaunching its tangerine‑peel functional drink in 2018 and introducing a new “Citrus Lemon Tea” in 2019. Revenue from non‑energy drinks and packaged drinking water grew to ¥189 million.

While these categories still represent a relatively small share of total revenue, Lin Muqin has a clear roadmap—particularly for Citrus Lemon Tea, which will be offered this year in 250ml/box, 310ml/can, 380ml/bottle, and 555ml/bottle formats. “Ten years ago, we introduced Eastroc Special Drink, which helped define energy drinks in China. Now we launch Citrus Lemon Tea to meet the consumption needs of the new generation. This ‘breakout’ packaging incorporates anime‑inspired design elements,” Lin remarked. “The fruit is fresh and juicy, with oil‑cutting and digestive benefits—it not only promotes the culinary culture of my hometown but also taps into the growing demand for healthier beverages. We will continue to develop products along this line, focusing on the functional beverage space.”

Combining a distinctive Chaoshan fruit with the popular lemon‑tea category and endorsed by top actress Yang Zi, can Citrus Lemon Tea truly become the next “breakout star” in lemon tea? The prospects are promising.

From the future plans outlined in the prospectus, it is clear that Lin Muqin is betting on a dual‑brand strategy featuring the “breakout combination” of Eastroc Special Drink and Citrus Lemon Tea: focus on expanding Eastroc Special Drink into untapped markets while deepening penetration in existing ones; and increase investment in new products like Citrus Lemon Tea, staying attuned to market trends and consumer demand to launch products with high growth potential.

As *Sun Tzu: The Art of War* states, “Speed like the wind, calm like the forest, fierce like fire, immovable like the mountain, elusive like the shadows, sudden like the thunder.” Lin Muqin’s business acumen speaks for itself. After successfully building Eastroc Special Drink into a powerhouse, he is now making a major push into the lemon‑tea category to capture new ground and open a “second front.” A successful listing would provide even greater momentum. In time, we may well witness the rise of another “Eastroc Special Drink”—this time in the tea‑beverage segment.