"How Did the Top Company Fall? Stock Price Halved Since Early This Year... Shaken by Owner Risk"

Dongfeng Beverage's Stock Price Halved Since Early This Year


"Not Drinking This Beverage" Video Sparks Controversy

Company Reports "Fabricated Video" to Authorities

The stock price of the leading company in China's energy drink market plummeted due to a fake video, prompting the company to take a tough stance. However, many Chinese media outlets have pointed out that intensified competition in the Chinese beverage market and declining profitability are also significant factors.

The stock price of the leading company in China's energy drink market plummeted due to a fake video, prompting the company to take a tough stance. Photo by Getty Images

According to Chinese local media outlet Sina Finance on June 29, a video titled "The chairman does not drink the company's own beverage" recently circulated widely on Chinese social networking services (SNS), sparking controversy. In response, Dongfeng Beverage issued an official statement.

Dongfeng Beverage Issues Official Statement Amid Controversy

Dongfeng Beverage. Chinese Weibo.

Dongfeng Beverage claimed that the video was an absurdly fabricated fake and stated that it had secured evidence and reported the matter to the Ministry of Public Security. The controversial video shows someone offering Dongfeng Beverage to Lin Muqin, a director at Dongfeng Beverage, who then waves his hand and replies, "I don't usually drink this, I drink other beverages instead."

Dongfeng Beverage was founded in 1994 and gained popularity by focusing on energy drinks as its main product. The company then targeted niche markets by launching carbonated water and a variety of teas. When Red Bull became popular in China, Dongfeng Beverage targeted the low-price market through its "1-yuan beverage" promotion, aimed at making drinks affordable for workers in transportation, construction, and parcel delivery industries.

Dongfeng Beverage's Stock Price Halved Compared to Early This Year

Falling Dongfeng Beverage Stock Price. China Weibo.

According to reports, Dongfeng Beverage's stock price has been on a steady decline recently. On June 26, the price fell to 110 yuan per share (approximately 25,000 won), which is half its value at the beginning of the year.

Chinese media pointed out that the recent fake video only partially contributed to the stock price decline and was not the fundamental cause. They analyzed that this was an inevitable consequence of the fiercely competitive landscape in the Chinese beverage market. In addition, they noted that Dongfeng Beverage's promotional events might contribute to short-term sales but could undermine profitability in the long run and have a negative impact on investments in new product development and marketing.

According to last year's annual results, Dongfeng Beverage's annual sales reached 20.875 billion yuan (approximately 4.7 trillion won), representing a 31.80% increase compared to the previous year. Sales of Dongfeng Energy Drink alone totaled 15.599 billion yuan (about 3.5 trillion won), accounting for 74.72% of the company's total revenue. This gives Dongfeng Beverage a 51.6% market share in terms of sales volume and 38.3% in terms of revenue in China's energy drink market—ranking first in both categories. In the first quarter of this year, sales were 5.888 billion yuan (about 1.33 trillion won), an increase of 21.46% year-on-year. However, the sales growth rate for energy drinks dropped to just over 13% in the first quarter of this year, compared to 28% in 2024, suggesting that signs of slowing growth had already appeared before the fake video controversy.

This content was produced with the assistance of AI translation services.