Macquarie released a research report stating that Eastroc Beverage (09980) is the second-largest player in China's functional beverage industry, holding a 23% market share by value; it is the largest player by volume, with a share of 26.3%. The bank believes that, leveraging its extensive channel penetration and an efficiently managed sales tracking system, Eastroc Beverage can continue to expand its market share. Consequently, the bank initiated coverage with an "Outperform" rating, setting target prices of 307 yuan for its A-shares and HK$345 for its H-shares. This valuation is based on a projected 2027 price-to-earnings ratio of 25 times, which the bank considers reasonable given its high two-year earnings compound annual growth rate of 25%. Per capita consumption of functional beverages in China is 9.9 liters, compared to 54.9 liters in the United States, 21.9 liters in Japan, and 16.5 liters in Thailand. According to research institution estimates, the compound annual growth rate for functional beverages during the forecast period from 2025 to 2029 is 10.9%, compared to 5.9% for soft drinks. Eastroc Beverage is the second-largest player, with a 2024 value market share of 23%, second only to Red Bull's 24.7%; within the energy drink sub-segment, Eastroc and Red Bull hold shares of 37% and 31%, respectively. Macquarie believes that, due to its channel penetration and sales efficiency, Eastroc Beverage can continue to gain share. Regarding profit forecasts, the bank predicts Eastroc Beverage's net profit will grow by 32%, 28%, and 22% in 2025, 2026, and 2027, respectively, with an expected earnings compound annual growth rate of 25% between 2025 and 2027.