Nongfu Spring 9633

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Wholesale Price of NONGFU SPRING Barreled Water Product Lifted by 20%: Report

NONGFU SPRING (09633.HK) raised the wholesale price of its barreled water product, according to people with the knowledge of the matter quoted by Chinese media.

The wholesale price of a 19-liter barreled water product was lifted from RMB15 to RMB18, an increment of 20%. The retail price of the product has not yet been adjusted.

Since the price of barreled water sold by NONGFU SPRING's own distribution service is lower than the retail price in the market, it is expected to squeeze the profit margins of small distributors, report said.

Related News: Jefferies Trims NONGFU SPRING (09633.HK) TP to $37.4, Predicts 1H24 NP Up 6.8% YoY

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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<Research>CICC Chops NONGFU SPRING (09633.HK) TP to $45 as Bottled Water Sales Pressured

CICC released a research report forecasting that NONGFU SPRING (09633.HK) will post a high single-digit YoY revenue growth in 1H24, mainly driven by the intact performance of tea beverages and juices, and a high single-digit YoY growth for net profit, mainly due to the improvement in product mix offset the unfavorable impact from bottled water, keeping net profit margin stable.

CICC believed that its bottled water sales will be under pressure in the short term, and may recover in the long term, with continuously strengthening competitiveness in the beverage industry.

Related News: Jefferies Trims NONGFU SPRING (09633.HK) TP to $37.4, Predicts 1H24 NP Up 6.8% YoY

CICC lowered its 2024/ 2025 earnings forecasts by 7%/ 10%, respectively.

Taking into consideration of the market valuation downside, CICC chopped its target price by 18% to $45, which corresponds to the forecasted PE ratio of of 35.7x/ 32.3x for 2024/ 2025 each, with rating kept at Outperform.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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<Research>Citi Has Positive Read-through from Zhong Shanshan's CCTV Interview, Expects NONGFU SPRING Interim NP to Record High Single-digit Growth

Zhong Shanshan, the Founder, controlling shareholder and Chairman of NONGFU SPRING (09633.HK) appeared in an interview program with CCTV last Saturday (10th), Citi Research issued a research report saying.

Citi Research believed that the interview reflects the Chinese government's recognition of NONGFU SPRING's business, which will give NONGFU SPRING's distributors more confidence in the Company.

Zhong is expected to step up his purchase of the Company's shares after the announcement of NONGFU SPRING's 1H24 results. Therefore, Citi Research kept rating at Buy, with a target price of $60.15.

Citi Research forecasted NONGFU SPRING's 1H24 net profit to reach high single-digit YoY growth, which is higher than the market consensus of a mid-to-high single digit YoY decline in net profit.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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Online attacks hurt Nongfu Spring

by Jamie Zhang

1H net profit grew 8 percent to 6.2 billion yuan (HK$6.78 billion) but sales of its drinking water products were affected by online attacks and malicious defamation.

The group saw its net profit at 6.24 billion yuan, an increase of 8 percent year-on-year.

Revenue for the first half of this year was 22.17 billion yuan, an increase of 8.4 percent year-on-year.

Since the end of February, there have been a large number of online attacks and malicious defamation against the company and its founders.

Drinking water products fell 18.3 percent to 8.53 billion yuan compared with the same period of last year, accounting for 38.5 percent of the total revenue.

Tea beverage products increased significantly by 59.5 percent to 8.43 billion yuan.

Source: The Standard

https://www.thestandard.com.hk/section- ... gfu-Spring

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Broker│View

Citi│Interim net profit in line, with major shareholders expected to resume buybacks

Goldman Sachs│Interim sales and net profit in line with continued momentum in tea and juice beverage sales offsetting softness in bottled water business

Huatai Securities│Bottled water under pressure in the short term, but the growth of ready-to-drink tea outstanding

CLSA│Decline in bottled water business offset by strong tea beverage growth

Jefferies│Results in line with broker and market expectations

Morgan Stanley│Interim sales and earnings broadly in line

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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<Research>HSBC Research Drops NONGFU SPRING (09633.HK) TP to $36.7 as No Surprises in Interim Results

There was no surprise in NONGFU SPRING (09633.HK) 's 1H24 results, and the water business is recovering, but at a slower pace, HSBC Global Research issued a research report saying.

HSBC Global Research lowered its 2024 revenue forecast for its water business by 14.1%, and now expected it to post a 6% decline in 2H24. Therefore, the broker lowered its 2024 net profit forecast by 1.4%.

Related News: CCBI Cuts NONGFU SPRING (09633.HK) TP to $32.7; Interim Results Broadly In Line

HSBC Global Research also lowered its 2024-2026 revenue forecasts by 3.3%/ 4.5%/ 4.5% respectively, and 2025-2026 net profit forecasts by 2%/ 1.7%.

The broker dropped its target price for the Company from $38.2 to $36.7, with rating kept at Buy.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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<Research>Citi Axes NONGFU SPRING (09633.HK) TP to $37.35; Expects 2H24 Growth to Stay Resilient

Citi Research commented in a report that NONGFU SPRING (09633.HK) logged an 8% YoY increase in net profit during 1H24, while revenue also rose 8%.

The 63% growth in tea beverage EBIT largely mitigated the negative impact of a 28% YoY decline in packaged water EBIT.

The broker projected the group's growth to remain strong in 2H24, with packaged water sales expected to recover to 5% YoY and beverage sales excluding packaged water expected to grow 13% YoY.

Citi lowered its net profit forecasts on the group for 2024/25 by 6% and 7%, as well as its sales forecasts by 8% and 4%.

The broker also expected the group's net profit margin to be stable at 27.8% in 2024.

Related News: BOCOMI Trims NONGFU SPRING (09633.HK) TP to $33.74; Rating Buy

Citi chopped its target price on NONGFU SPRING from $60.15 to $37.35 and rated the stock Buy.

The broker expected the company's controlling shareholders to resume share buybacks after the interim results announcement.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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non-vested

<Research>BOCI Raises NONGFU SPRING (09633.HK) TP to $39.1 as Bottled Water Sales Expected to Rebound This Yr

NONGFU SPRING (09633.HK) 's valuation premium remained supported, while bottled water sales are expected to rebound in 2025, BOCI released a research report saying.

Therefore, the broker lowered its 2024-2026 revenue forecasts for NONGFU SPRING by 4-5%, and raised its target price to $39.1, corresponding to a 2025 projected PE ratio of 29.9x, with rating kept at Buy.

Drawing on the experience of Japan's ready to drink (RTD) soft beverage market, sugar-free RTD tea experienced rapid growth and penetration during Japan's economic recession in 1990s, BOCI noted.

The segment also experienced explosive growth in China over the past 3 years, and is expected to maintain double-digit sales growth from 2025 to 2026.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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not vested

Controversy, competition hit Nongfu

Net profit of 12 billion yuan (HK$12.85 billion) for last year, only 0.4 percent more than a year ago,

Total revenue rose just 0.5 percent to 42.9 billion yuan, with contributions from water products - its core segment - diving 21 percent to 15.95 billion yuan.

In March 2024, Nongfu faced boycott calls over an old debate of Zhong's over water quality compared to other brands, especially after Zong Qinghou, the founder of beverage maker Wahaha, passed away in February.

Some angry users even alleged that Zhong's son holds a US passport.

Source: The Standard

https://www.thestandard.com.hk/section- ... hit-Nongfu