Eastroc Beverage initiated its global offering on January 26, with pricing expected on January 30 and a scheduled listing on the Hong Kong Stock Exchange on February 3. The maximum offer price is set at HK$248 per share, with a base offering of approximately 40.89 million shares. Post-greenshoe, the total offering could reach about 47.02 million shares, corresponding to a fundraising scale of approximately HK$10.1 to HK$11.7 billion.
Notably, the maximum offer price represents only a 15.5% discount to its A-share closing price, which is significantly lower than the typical discounts seen in comparable listings and consumer stocks. The price-to-earnings (P/E) ratio implied by the maximum offer price exceeds the average for the beverage sector in Hong Kong, raising questions about valuation rationality. Furthermore, with the company already holding ample cash reserves, the necessity of this fundraising has sparked widespread debate. However, as a high-growth standout in the consumer sector, its impressive financial performance and generous dividends have attracted a prestigious lineup of 15 well-known institutions as cornerstone investors. Amidst these multiple points of interest and controversy, its post-listing performance in Hong Kong is highly anticipated.
The maximum offer price discount is lower than comparable market listings, and the absence of a price floor provides pricing flexibility.
The maximum H-share offer price represents a discount of approximately 15.5% to the A-share closing price of 262.50 yuan on January 28. However, based on past project experience, the attractiveness of this discount level appears relatively limited.
First, referencing A-to-H listings since 2025, issuers with market capitalizations around the hundred-billion level at pricing typically saw issuance discounts ranging between 20% and 40%. Among these, Sany Heavy Industry had the smallest discount at 14.3%. Eastroc Beverage's 15.5% discount is close to this minimum and does not form a distinct discount advantage among similar large-cap projects, offering insufficient appeal for investors seeking a safety margin.
Second, market trends show that the issuance discounts for A-to-H projects completed since 2026 have widened significantly compared to 2025. Three A-to-H deals have been completed so far in 2026, with issuance discounts for the hundred-billion market cap firms Will Semiconductor and GigaDevice reaching 27.1% and 43.6% respectively, while Longcheer Tech's discount also exceeded 40%. This indicates a clear increase in discount levels compared to similar 2025 projects. This trend is closely linked to changes in market supply—with 20 companies having completed A-to-H listings in 2025, ample project reserves have led to stricter screening criteria and higher investor demands for discounts.
Third, compared to consumer staples stocks listed since 2025, Eastroc Beverage's discount level is also on the low end. The weak debut performances of similar consumer stocks, attributed to insufficient discounts, serve as a cautionary reference. Among consumer staples listings since 2025, Fos Haitian's issuance discount was 17.3%, and Anjoy Foods' discount reached 32.0%, both higher than Eastroc's 15.5%. Post-pricing, market feedback generally indicated insufficient safety margins for these two companies, a concern validated by their debut performances: Fos Haitian's shares fell below the offer price intraday on its first day, only being pulled back above the issue price with the support of the greenshoe mechanism, while Anjoy Foods closed its first day down 5% from the offer price.
However, it is worth noting that the company has not set a minimum offer price, an arrangement that provides ample flexibility for final pricing, allowing for dynamic adjustments based on market feedback to better suit the current environment.
Fifteen prestigious institutions participate as cornerstone investors, with high growth and high dividends winning institutional favor.
Eastroc Beverage's IPO cornerstone investor lineup is exceptionally strong, attracting 15 cornerstone investors committing a total of $640 million, accounting for 49.2% of the offering. This represents a significant advantage among Hong Kong IPOs raising over ten billion dollars in recent years. The participants encompass overseas sovereign wealth funds, foreign long-term funds, industrial capital, and renowned Chinese institutions: The participation of the Qatar Investment Authority is particularly noteworthy, as this leading global sovereign fund marked three "firsts"—its first time as a cornerstone investor in an A-to-H IPO, its first IPO cornerstone investment in the consumer sector, and its $150 million commitment becoming its largest-ever cornerstone investment. Affiliates of Temasek, BlackRock, and UBS Asset Management also joined the lineup, with J.P. Morgan Asset Management participating as a cornerstone investor in a Hong Kong IPO for the first time. Industrial capital from entities related to Tencent, Kerry Holdings, and Li-Ning, alongside Chinese institutions like Sequoia, Boyu, Pinpoint Asset Management, and Taikang Insurance, also made substantial investments.
The favor from institutional investors stems primarily from Eastroc Beverage's robust high-growth trajectory and generous dividend returns. From 2022 to 2024 and for the first three quarters of 2025, the company's revenues were 8.50 billion yuan, 11.26 billion yuan, 15.83 billion yuan, and 16.84 billion yuan, respectively, achieving a three-year compound annual growth rate (CAGR) of 36.5%. Year-over-year growth for the first nine months of 2025 also reached 34.1%, maintaining a stable high-growth pattern.
During the same periods, its net profit attributable to shareholders was 1.44 billion yuan, 2.04 billion yuan, 3.33 billion yuan, and 3.76 billion yuan, respectively, with a three-year CAGR of 52.0%. Although the year-over-year growth rate for the first three quarters of 2025 slowed to 38.9%, it remains highly attractive overall.
According to its earnings forecast, the company expects full-year 2025 revenue to reach between 20.8 billion yuan and 21.1 billion yuan, representing year-over-year growth of 31.1% to 33.3%. Net profit attributable to shareholders is projected to be between 4.34 billion yuan and 4.59 billion yuan, an increase of 30.5% to 38.0%, indicating profit growth outpacing revenue growth.
Regarding dividends, from 2021 to mid-2025, Eastroc Beverage has cumulatively distributed 6.6 billion yuan in dividends, with a dividend payout ratio never falling below 50% in any period. Notably, the payout ratio reached 101% in 2021, providing substantial returns to shareholders.
Concurrent fundraising, dividends, and share reductions provoke market scrutiny.
Despite its stellar performance, Eastroc Beverage's plan to list in Hong Kong has also sparked market controversy, primarily focusing on the necessity of fundraising and shareholder cash-outs. In fact, the company had previously pursued international capital market strategies, having planned to issue Global Depository Receipts (GDRs) on the SIX Swiss Exchange in June 2022 to expand into the European market. However, due to tightening regulatory requirements for overseas listings, this plan was terminated in February 2024, leading to the initiation of the Hong Kong listing process.
As of the end of the first three quarters of 2025, the company held 5.72 billion yuan in monetary funds, 3.48 billion yuan in financial assets at fair value, and 6.066 billion yuan in retained earnings. Despite these ample cash reserves, its decision to seek funding in Hong Kong has led to discussions about its true listing intentions.
Simultaneously, the company's actions involving fundraising, dividend distributions, and share sell-downs have drawn significant attention. The ownership structure shows the founding family collectively holds over 65% of shares, meaning that of the 6.6 billion yuan in dividends distributed since listing, over 4 billion yuan has flowed to the founding family.
Furthermore, Eastroc Beverage has witnessed multiple substantial share reductions by major shareholders and senior executives. Since the lock-up period expired in May 2022, the company has issued seven reduction announcements. The former second-largest shareholder, Jun Zheng Investment, cashed out tens of billions through multiple reductions and is no longer listed among the top ten shareholders.
Regarding shareholders related to the founding family, in February 2025, the company's third-largest shareholder, Kunpeng Investment, disclosed a plan to reduce its holdings by up to 7.1689 million shares, representing 1.3786% of the total share capital. By May 2025, Kunpeng Investment terminated this plan early, having already sold 7.1678 million shares via block trades and centralized bidding at prices ranging from 254.28 yuan to 293 yuan per share, realizing total proceeds of 1.908 billion yuan.
P/E ratio rivals beverage leader Nongfu Spring—can high growth support the industry premium?
Regarding valuation, Eastroc Beverage also faces market debate over its reasonableness. Comparing it to sizable beverage companies in the Hong Kong market, while Eastroc exhibits significant advantages in revenue and net profit growth, its P/E ratio has clearly diverged from the sector's typical range. The maximum offer price implies a P/E ratio based on 2024 earnings, a trailing-twelve-month (TTM) P/E, and a forecasted 2025 P/E of approximately 54.2x, 41.2x, and 39.9x, respectively. These figures not only exceed the corresponding valuations of sector leader Nongfu Spring but are also substantially higher than the typical forecasted 2025 P/E of around 20x for other beverage companies.
Although Nongfu Spring's net profit growth rate is lower than Eastroc's, its valuation is supported by a much larger revenue and profit base, a more stable dividend yield, and a more diversified product portfolio. Consequently, the market is questioning whether Eastroc's high-growth attributes can justify a valuation comparable to Nongfu Spring's and whether it deserves such a significant valuation premium over other beverage companies.
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