Core Viewpoint - The ongoing price war in China's bottled water market has intensified, particularly among major players like Nongfu Spring, Wahaha, and Yibao, leading to significant market share shifts and financial impacts on the companies involved [2][5][10]. Group 1: Market Dynamics - Nongfu Spring launched its green bottle purified water at a retail price of 1 yuan per bottle, directly targeting the core markets of Yibao and Wahaha [2][8]. - The competition has escalated to a "water war" among the three companies, with each investing heavily in subsidies and pricing strategies to capture market share [5][10]. - As of August 2025, Wahaha's market share increased from 14.22% to 17.7%, while Yibao's share dropped from 25.11% to 20.34% [10][12]. Group 2: Pricing Strategies - Retail prices for bottled water have plummeted, with Nongfu Spring's red bottle water being sold at around 0.8 yuan per bottle, nearly matching the wholesale price [5][10]. - Yibao has also engaged in aggressive pricing tactics, including promotional offers that have seen prices drop to as low as 0.01 yuan per bottle [8][10]. - The intense competition has led to a phenomenon of "price inversion," where distributors sell products below cost to meet sales targets and maintain market presence [12][13]. Group 3: Financial Performance - Yibao's financial results for the first half of 2025 showed a significant decline, with revenue dropping by 18.52% to 6.206 billion yuan and net profit decreasing by 28.74% to 0.823 billion yuan [16]. - The gross margin for Yibao fell from 49.3% to 46.7%, indicating pressure on profitability due to the ongoing price war [16]. - The overall bottled water market has seen a shift, with Yibao's previously steady market share now facing unprecedented challenges due to aggressive pricing from competitors [14][16].

Core Viewpoint - The ongoing price war in China's bottled water market has intensified, with major players like Nongfu Spring, Wahaha, and Yibao engaging in aggressive pricing strategies, leading to significant market share shifts and financial impacts on the companies involved [1][6][13]. Group 1: Price War Dynamics - Nongfu Spring launched its green bottle purified water at a retail price of 1 yuan per bottle, directly targeting the core markets of Yibao and Wahaha [1][6]. - The retail price of Nongfu Spring's red bottle water has dropped to around 0.8 yuan per bottle due to heavy subsidies from the company and external platforms [3][8]. - Wahaha, under the leadership of Zong Fuli, has also reduced its bottled water prices to below 1 yuan, employing aggressive promotional strategies similar to those seen in other sectors [6][8]. Group 2: Market Share Changes - As of April 2024, Wahaha's market share in the bottled water segment increased from 14.22% to 17.7%, while Yibao's share decreased from 25.11% to 20.34% [8][12]. - The competitive landscape has shifted significantly, with Nongfu Spring maintaining a leading position despite short-term fluctuations in market share [8][12]. Group 3: Financial Performance - Yibao's revenue and net profit have declined significantly, with a reported 18.52% drop in revenue and a 28.74% decrease in net profit for the first half of 2025 compared to the same period in 2024 [15][16]. - The gross margin for Yibao has decreased by 2.6 percentage points, indicating pressure on profitability amid the price war [15][16]. Group 4: Industry Practices - The practice of "performance betting" in subsidies has become common, where distributors face pressure to meet sales targets or risk losing rewards, leading to price undercutting [8][11]. - Instances of "price inversion" have emerged, where distributors sell products below cost to maintain market presence, reflecting the intense competitive pressures in the industry [11][12].

包装水市场三巨头大战一年半，战况如何？ 每经记者从线下零售监测机构了解到，截至目前的战况是：娃哈哈在竞争中实现份额逐步增长，2024年 4月至2025年8月，娃哈哈集团包装水市占率从14.22%增长至17.7%；同期，华润饮料包装水市占率则从 25.11%下跌至20.34%，下滑近5个百分点；而农夫山泉虽然市场份额有波动，但整体领先，仍然"有点 甜"。 （文章来源：每日经济新闻） 2024年4月，农夫山泉推出绿瓶纯净水，并将终端价下探至1元/瓶，直接瞄准了将包装纯净水作为主战 场的怡宝与娃哈哈的核心腹地。 农夫山泉和怡宝都投入了充足的"弹药"进行"水战"，然而，接班娃哈哈后的宗馥莉也没闲着，果断参 战。于是，"水战三国"上演了。 ...

Core Viewpoint - The intense competition in the bottled water market in China has led to a significant price war among major players, particularly between Nongfu Spring, Wahaha, and Yibao, with Nongfu Spring's introduction of the green bottle water at a price point of 1 yuan per bottle directly targeting the core market of Yibao and Wahaha [2][8]. Group 1: Market Dynamics - Nongfu Spring launched its green bottle water in April 2024, reducing the retail price to 1 yuan per bottle, intensifying competition in the bottled water sector [2][8]. - The competition has been characterized as a "water war" among the three companies, with each investing heavily in marketing and pricing strategies to capture market share [6][10]. - As of May 31, 2024, Nongfu Spring's green bottle water achieved sales of over 1 million units within a short period [3]. Group 2: Pricing Strategies - The retail price for Nongfu Spring's red bottle water is 2 yuan, but through various subsidies, the effective price can drop to around 0.8 yuan per bottle for consumers [6][10]. - Yibao has also engaged in aggressive pricing strategies, including promotional offers that have seen prices drop to as low as 0.01 yuan per bottle [8][10]. - The pricing strategies have led to a situation where the cost for distributors and retailers is often lower than the retail price, creating a "price inversion" scenario [12][14]. Group 3: Market Share Changes - As of April 2024, Wahaha's market share increased from 14.22% to 17.7% during the ongoing competition, while Yibao's market share decreased from 25.11% to 20.34% [10][16]. - The competitive landscape has shifted significantly, with Yibao experiencing a decline in market share for the first time since 2005, attributed to the aggressive pricing and marketing of Nongfu Spring's green bottle water [16][18]. - Yibao's revenue and net profit have also seen a decline, with a reported 18.52% drop in revenue and a 28.74% drop in net profit in the first half of 2025 compared to the previous year [18][19]. Group 4: Industry Trends - The bottled water industry in China has seen a dramatic evolution over the past three decades, with Yibao and Nongfu Spring emerging as key players [19][24]. - The current price war reflects a broader trend in the industry where companies are increasingly relying on aggressive pricing to capture market share, particularly in the low-price segment [24][25]. - The competitive strategies employed by these companies highlight the challenges faced by traditional market leaders like Yibao, which is struggling to maintain its competitive edge amid rising competition [25].

Core Insights - The article discusses the current landscape of the light food industry in China, highlighting the limited number of publicly listed companies and their cross-industry expansions into the light food sector [1][6]. Group 1: Overview of Listed Companies - The light food industry has few listed companies, with many being cross-industry brands such as Nayuki Tea, Three Squirrels, and others venturing into the light food market [1]. - Key players include Nayuki Tea (02150.HK), Three Squirrels (300783.SZ), and others, each focusing on different segments of the light food market [1][2]. Group 2: Company Profiles and Financials - Nayuki Tea is projected to generate 49.2 billion yuan in revenue in 2024, focusing on a health-oriented dining experience [4]. - Three Squirrels is expected to achieve 106.2 billion yuan in revenue, targeting the casual snack market with its sub-brands [4]. - Farmer Spring leads with 428.96 billion yuan in revenue, while Baihe Co. has the lowest at 8.01 billion yuan [8]. Group 3: Business Strategies and Market Positioning - Nayuki Tea and KEEP target young professionals and fitness enthusiasts, offering specialized stores and meal options to meet all-day light food needs [9][10]. - Three Squirrels and Liangpinpuzi focus on low-calorie snacks for the general health-conscious market, while West Oats and Taoli Bread cater to fitness consumers with nutritious and convenient food options [9][10]. - Companies like Kangbiter and Baihe Co. provide products aimed at sports enthusiasts, focusing on body management and post-exercise nutrition [9][10]. Group 4: Sales Channels and Performance - Nayuki Tea operates a balanced online and offline sales strategy, with over 1,453 stores and a significant presence on delivery platforms [11]. - Three Squirrels primarily focuses on online sales, while companies like Taoli Bread and Farmer Spring rely more on offline channels [11]. - In 2024, Nayuki Tea's energy bowl packages are expected to sell over 29.2 million units, showcasing strong market demand [12][13]. Group 5: Future Plans and Innovations - Companies are planning to expand their light food offerings through new store formats, product innovations, and enhanced distribution channels [15]. - Nayuki Tea plans to launch a new store type, "Nayuki Green," focusing on low-calorie and healthy options for urban consumers [10].

Group 1 - The core viewpoint emphasizes the need for traditional brands to find new positioning strategies to navigate consumer cycles and for new brands to achieve rapid growth across categories [1] - Cultural strategy has become a key element in brand strategy, especially in the high-end market, where product characteristics alone are insufficient to build brand momentum [2][4] - The Chinese market shows a disparity in brand momentum between local and international brands, with examples like China Red Bull and Austrian Red Bull illustrating different market scales and brand strategies [4] Group 2 - The white liquor industry in China is experiencing a shift from quantity to quality, with market size increasing from 536.4 billion yuan in 2018 to 756.3 billion yuan in 2023, despite production halving [8] - Major liquor brands are adopting cultural strategies to connect with younger consumers, moving from traditional relationship-based consumption to self-expression and cultural values [9] - Successful brands like Moutai and Wuliangye are developing comprehensive cultural systems to enhance their brand value and consumer connection [9] Group 3 - The article discusses the pitfalls of brands that focus solely on product attributes, such as Wanglaoji and Six Walnut, which have struggled to maintain market relevance [4][5] - The case of Nongfu Spring illustrates the importance of evolving brand narratives beyond product quality to include cultural and environmental themes, leading to a resurgence in market leadership [7] - The need for liquor brands to embrace cultural strategies is highlighted, as many still rely on outdated marketing approaches that fail to resonate with modern consumers [12] Group 4 - The article notes that many liquor brands lack a strategic understanding of consumer culture, which hinders their ability to establish effective brand positioning [12] - It emphasizes the importance of emotional and ideological engagement in building brand culture, as seen in successful examples from both domestic and international markets [15] - The competitive landscape necessitates that brands connect consumer culture with added value to differentiate themselves effectively [17]

Investment Rating - The industry rating is maintained as "Outperform the Market" [7] Core Viewpoints - The pre-prepared food concept is driving short-term performance in the catering supply sector, with a focus on the upcoming double festival catalysis [5][16] - The overall food and beverage sector experienced a decline of 2.53% from September 15 to September 19, with specific segments like pre-processed foods and soft drinks showing positive performance [23][26] Summary by Sections Market Performance Review - From September 15 to September 19, the food and beverage sector declined by 2.53%, while the Shanghai Composite Index and CSI 300 Index fell by 1.30% and 0.44%, respectively [23] - Specific segment performances included: pre-processed foods (+0.32%), soft drinks (+0.07%), and health products (+0.05%), while snacks (-1.28%) and meat products (-3.64%) saw declines [23] Alcoholic Beverages - The liquor sector saw a decline of 2.95%, underperforming compared to the overall food and beverage sector and the CSI 300 [14] - Key brands like Jinhuijiu and Gujinggongjiu experienced significant drops, with the overall consumption environment remaining under pressure [14] - The current PE-TTM for the liquor index is 19X, indicating a relatively low valuation compared to the past decade [14] Beer Sector - The beer sector showed a slight increase of 0.03%, with brands like Qingdao Beer and Yanjing Beer performing well [15] - Cumulative beer production from January to August 2025 was 26.83 million kiloliters, a slight decrease of 0.2% year-on-year [15] Investment Recommendations - For the liquor sector, three main investment lines are recommended: strong beta stocks (e.g., Jiugui Jiu, Shui Jing Fang), value recovery stocks (e.g., Yingjia Gongjiu), and strong alpha stocks (e.g., Shanxi Fenjiu, Guizhou Moutai) [22] - In the beer sector, focus on companies with sustained growth potential and those benefiting from cost reductions [22] Key Data Tracking - The average price of fresh milk in major production areas was 3.03 yuan/kg as of September 18, 2025, with no year-on-year change [20] - The production capacity of Daizhou yellow wine increased from 18,000 tons to 130,000 tons over the past three years, with a reported output value of 263 million yuan in the first half of the year, up 14.3% year-on-year [14]

[Company Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Basic Information and Governance Structure](index=2&type=section&id=Company%20Basic%20Information%20and%20Governance%20Structure) This chapter outlines Nongfu Spring Co., Ltd.'s listing information, registered address, main business locations, website, and the composition of its Board of Directors, Supervisory Committee, various committees, company secretary, principal bankers, legal advisors, and auditors, with recent changes in personnel - Nongfu Spring Co., Ltd. was listed on the Main Board of The Stock Exchange of Hong Kong Limited on **September 8, 2020**, with stock code **9633**[6](index=6&type=chunk)[7](index=7&type=chunk) - The company's registered office and headquarters are located at No. 181 Ge Yiazhuang, Xihu District, Hangzhou, Zhejiang, China[6](index=6&type=chunk)[7](index=7&type=chunk) - Mr. Zhong Shanshan serves as the Chairman and General Manager of the Board, which includes executive directors, non-executive directors, and independent non-executive directors[6](index=6&type=chunk)[7](index=7&type=chunk) - Mr. Stanley Yi Chang resigned as Chairman of the Audit Committee on March 17, 2025, and Mr. Gu Chaoyang was appointed as Chairman on May 20, 2025[9](index=9&type=chunk)[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Economic Environment](index=6&type=section&id=Economic%20Environment) In the first half of 2025, the global economy was complex, while China's economy showed steady growth with a 5.3% GDP increase and a 5.0% rise in retail sales, driving a healthy beverage industry with strong growth in sugar-free tea and functional drinks - In the first half of 2025, China's Gross Domestic Product (GDP) reached **RMB 66.1 trillion**, a **5.3% year-on-year increase**[15](index=15&type=chunk)[18](index=18&type=chunk) - Total retail sales of consumer goods reached **RMB 24.5 trillion**, increasing by **5.0% year-on-year**, with final consumption expenditure contributing **52%** to GDP growth[15](index=15&type=chunk)[18](index=18&type=chunk) - China's beverage industry performed well, with year-on-year growth in revenue and profit, driven by deepening health and natural trends, and strong growth in segments like sugar-free tea and functional drinks[15](index=15&type=chunk)[19](index=19&type=chunk) - New food labeling regulations (e.g., GB 28050-2025) were issued, imposing more detailed requirements for nutrition information and emphasizing the importance of corporate R&D and supply chain control capabilities[16](index=16&type=chunk)[20](index=20&type=chunk) [Business Review](index=7&type=section&id=Business%20Review) In the first half of 2025, the Group's revenue reached RMB 25,622 million, a 15.6% year-on-year increase, with packaged drinking water growing by 10.7% and beverage products by 18.7%, driven by strong performance across all categories 2025 H1 Revenue and Proportion by Product Category | Product Category | 2025 Revenue (RMB million) | 2025 Proportion | 2024 Revenue (RMB million) | 2024 Proportion | Change (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total** | **25,622** | **100.0%** | **22,173** | **100.0%** | **3,449** | **15.6%** | | Packaged Drinking Water Products | 9,443 | 36.9% | 8,531 | 38.5% | 912 | 10.7% | | Tea Beverage Products | 10,089 | 39.4% | 8,430 | 38.0% | 1,659 | 19.7% | | Functional Beverage Products | 2,898 | 11.3% | 2,550 | 11.5% | 348 | 13.6% | | Juice Beverage Products | 2,564 | 10.0% | 2,114 | 9.5% | 450 | 21.3% | | Other Products | 629 | 2.4% | 548 | 2.5% | 81 | 14.8% | [Packaged Drinking Water Products](index=7&type=section&id=Packaged%20Drinking%20Water%20Products) Packaged drinking water revenue increased by 10.7% to RMB 9,443 million in H1 2025, supported by new water sources, brand promotion, and product line extensions like commemorative mineral water and edible ice - Packaged drinking water product revenue was **RMB 9,443 million**, a **10.7% year-on-year increase**, accounting for **36.9% of total revenue**[25](index=25&type=chunk)[26](index=26&type=chunk) - Three new water sources were added in Hunan Badagongshan, Sichuan Longmenshan, and Tibet Nyenchen Tanglha Mountains, bringing the national water source layout to **fifteen**[29](index=29&type=chunk)[31](index=31&type=chunk) - The "Natural Water Source, Transparent Factory" campaign continued to be promoted through multiple channels, reinforcing the brand's "natural and healthy" philosophy[29](index=29&type=chunk)[31](index=31&type=chunk) - The company launched a "Year of the Snake" commemorative glass bottled mineral water and "Nongfu Spring" pure transparent edible ice, expanding its product line and consumption scenarios[30](index=30&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [Tea Beverage Products](index=9&type=section&id=Tea%20Beverage%20Products) Tea beverage revenue grew by 19.7% to RMB 10,089 million in H1 2025, driven by new "Oriental Leaf" flavors, the launch of "Ice Tea" carbonated tea, and rural revitalization initiatives - Tea beverage product revenue was **RMB 10,089 million**, a **19.7% year-on-year increase**, accounting for **39.4% of total revenue**[34](index=34&type=chunk)[36](index=36&type=chunk) - "Oriental Leaf" launched a seasonal limited "Longjing New Tea" and a new "Dried Tangerine Peel White Tea" flavor, and initiated its first "Open Cap to Win Prizes" event to enhance consumer interaction and brand loyalty[37](index=37&type=chunk) - The new carbonated tea beverage "Ice Tea" was launched, made from **100% real tea extract** with high tea polyphenol content, also featuring an "Open Cap to Win Prizes" event[38](index=38&type=chunk) - **Five modern tea primary processing factories** were donated and built in Pu'er City and Lincang City, Yunnan Province, to support rural revitalization through industrial assistance to farmers[35](index=35&type=chunk)[39](index=39&type=chunk) [Functional Beverage Products](index=10&type=section&id=Functional%20Beverage%20Products) Functional beverage revenue increased by 13.6% to RMB 2,898 million in H1 2025, benefiting from rising consumer interest in sports and health drinks, enhanced by sports sponsorships and social media engagement - Functional beverage product revenue was **RMB 2,898 million**, a **13.6% year-on-year increase**, accounting for **11.3% of total revenue**[40](index=40&type=chunk)[43](index=43&type=chunk) - Sponsorship of sports events and social media interactions enhanced the exposure of "Scream" and "Powerade Vitamin Water" brands, deepening communication with younger demographics[40](index=40&type=chunk)[44](index=44&type=chunk) [Juice Beverage Products](index=10&type=section&id=Juice%20Beverage%20Products) Juice beverage revenue grew by 21.3% to RMB 2,564 million in H1 2025, driven by the launch of new premium juices and expanded distribution of existing high-end products - Juice beverage product revenue was **RMB 2,564 million**, a **21.3% year-on-year increase**, accounting for **10.0% of total revenue**[41](index=41&type=chunk)[45](index=45&type=chunk) - The "17.5˚" Blue Honeysuckle Mixed Juice was launched, utilizing fresh fruit pressing technology and rich in anthocyanins[41](index=41&type=chunk)[46](index=46&type=chunk) - The "17.5˚" 100% Fresh Cold-Pressed Orange Juice 900mL large bottle was listed in Sam's Club, becoming a hot-selling product and enriching the high-end juice product line[41](index=41&type=chunk)[46](index=46&type=chunk) [Other Products](index=10&type=section&id=Other%20Products) Other products, including soda water, coffee, and agricultural products, generated RMB 629 million in revenue in H1 2025, a 14.8% increase, with new offerings emphasizing natural, healthy, and high-quality attributes - Other products revenue was **RMB 629 million**, a **14.8% year-on-year increase**, accounting for **2.4% of total revenue**[42](index=42&type=chunk)[47](index=47&type=chunk) - "Nongfu Spring" Soda Natural Water beverages emphasize the concept of "good water, good soda," being sugar-free, uncarbonated, weakly alkaline, and rich in natural mineral elements[48](index=48&type=chunk)[49](index=49&type=chunk) - "Tan Bing" launched a low-temperature sugar-free black coffee in Sam's Club, made from freshly ground and extracted coffee beans, with **0 sugar, 0 calories, 0 fat, 0 flavorings, 0 instant coffee powder**, and full cold chain transportation[48](index=48&type=chunk)[50](index=50&type=chunk) [Outlook](index=11&type=section&id=Outlook) The Group plans to optimize its water source layout, expand into international markets, and reinforce its "natural and healthy" brand image through a "channel-product-culture" strategy, capitalizing on the growing and diversifying food and beverage market - China's food and beverage industry market continues to expand, with nutrition, health, and diversified consumption trends driving industry transformation, and rapid growth in segments like sugar-free tea and functional beverages[51](index=51&type=chunk)[52](index=52&type=chunk) - The Group will continue to optimize and improve its water source layout, adding three new water sources in Hunan Badagongshan, Sichuan Longmenshan, and Tibet Nyenchen Tanglha Mountains, to reduce production costs and enhance supply efficiency[51](index=51&type=chunk)[53](index=53&type=chunk) - Core products have officially entered the Hong Kong market, covering over **3,500 retail terminals**, with future plans to explore other overseas markets and expand international growth opportunities[54](index=54&type=chunk)[58](index=58&type=chunk) - The "channel-product-culture" integrated strategy will strengthen the "natural and healthy" brand philosophy, promoting brand premiumization and internationalization[54](index=54&type=chunk)[58](index=58&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) In H1 2025, Nongfu Spring achieved strong financial performance with revenue up 15.6% to RMB 25,622 million, gross profit up 18.6% to RMB 15,456 million, and profit for the period up 22.1% to RMB 7,622 million, while cash and bank balances significantly increased 2025 H1 Key Financial Indicators | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 25,622 | 22,173 | 15.6% | | Gross Profit | 15,456 | 13,032 | 18.6% | | Gross Profit Margin | 60.3% | 58.8% | +1.5pp | | Selling and Distribution Expenses | 5,011 | 4,971 | 0.8% | | Selling and Distribution Expenses as % of Total Revenue | 19.6% | 22.4% | -2.8pp | | Administrative Expenses | 1,068 | 913 | 17.0% | | Other Income and Gains | 808 | 1,040 | -22.3% | | Other Expenses | 127 | 6 | 2016.7% | | Finance Costs | 25 | 39 | -35.9% | | Profit for the Period | 7,622 | 6,240 | 22.1% | [Revenue and Gross Profit](index=12&type=section&id=Revenue%20and%20Gross%20Profit) In H1 2025, Group revenue increased by 15.6% to RMB 25,622 million, with gross profit rising 18.6% to RMB 15,456 million, and gross profit margin improving to 60.3% due to lower raw material costs - Gross profit margin increased by **1.5 percentage points to 60.3%**, primarily due to lower procurement prices for PET raw materials, as well as packaging materials like cartons and raw materials like white sugar[55](index=55&type=chunk)[59](index=59&type=chunk) [Selling and Distribution Expenses](index=12&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by 0.8% to RMB 5,011 million, but as a percentage of total revenue, they decreased by 2.8 percentage points to 19.6%, mainly due to lower advertising and promotion expenses and logistics rates - Selling and distribution expenses as a percentage of total revenue decreased by **2.8 percentage points to 19.6%**, mainly due to a decrease in advertising and promotion expenses and a reduction in logistics rates influenced by product sales structure[56](index=56&type=chunk)[60](index=60&type=chunk) [Administrative Expenses](index=12&type=section&id=Administrative%20Expenses) Administrative expenses increased by 17.0% to RMB 1,068 million, remaining stable at 4.2% of total revenue [Other Income and Gains](index=13&type=section&id=Other%20Income%20and%20Gains) Other income and gains decreased by 22.3% to RMB 808 million, accounting for 3.2% of total revenue, primarily due to reduced deposit interest income from lower interest rates - Other income and gains decreased by **22.3% year-on-year**, primarily due to a reduction in deposit interest income resulting from lower interest rates[62](index=62&type=chunk)[67](index=67&type=chunk) [Other Expenses](index=13&type=section&id=Other%20Expenses) Other expenses significantly increased by 2,016.7% to RMB 127 million, representing 0.5% of total revenue, mainly comprising RMB 50 million in donations and RMB 66 million in exchange losses - Other expenses significantly increased by **2,016.7% year-on-year**, primarily including **RMB 50 million in donation expenses** and **RMB 66 million in exchange losses**[63](index=63&type=chunk)[68](index=68&type=chunk) [Finance Costs](index=13&type=section&id=Finance%20Costs) Finance costs decreased from RMB 39 million to RMB 25 million compared to the prior period [Profit for the Period](index=13&type=section&id=Profit%20for%20the%20Period) Profit for the period increased by 22.1% to RMB 7,622 million [Dividends](index=13&type=section&id=Dividends) The company approved a final cash dividend of RMB 0.76 per share (tax inclusive) for 2024, totaling approximately RMB 8,547 million, payable on August 27, 2025, with no interim dividend declared for H1 2025 - The **2024 final cash dividend of RMB 0.76 per share** (tax inclusive), totaling approximately **RMB 8,547 million**, will be distributed on **August 27, 2025**[66](index=66&type=chunk)[71](index=71&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[66](index=66&type=chunk)[71](index=71&type=chunk) [Long-term Bank Deposits, Restricted Funds, Cash, Bank Balances and Borrowings](index=14&type=section&id=Long-term%20Bank%20Deposits%2C%20Restricted%20Funds%2C%20Cash%2C%20Bank%20Balances%20and%20Borrowings) As of June 30, 2025, the Group's total long-term bank deposits, restricted funds, cash, and bank balances increased by 23.7% to RMB 26,419 million, while interest-bearing borrowings rose by 21.9% to RMB 4,420 million Cash and Borrowings Status | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total long-term bank deposits, restricted funds, cash and bank balances | 26,419 | 21,361 | 23.7% | | Interest-bearing borrowings | 4,420 | 3,625 | 21.9% | - As of June 30, 2025, a total of **RMB 8,442 million** of matured borrowings had been repaid, and all borrowings were denominated in RMB with no fixed-rate borrowings[72](index=72&type=chunk)[77](index=77&type=chunk) [Inventories](index=14&type=section&id=Inventories) Inventories increased from RMB 5,013 million to RMB 5,104 million, with inventory turnover days rising from 82.3 to 90.8, primarily due to increased production stocking and raw material end-of-period inventory - Inventory turnover days increased from **82.3 days** as of December 31, 2024, to **90.8 days** as of June 30, 2025[73](index=73&type=chunk)[78](index=78&type=chunk) [Trade and Bills Receivables](index=14&type=section&id=Trade%20and%20Bills%20Receivables) Trade and bills receivables increased from RMB 581 million to RMB 836 million, with turnover days rising from 4.8 to 5.0 - Trade and bills receivables turnover days increased from **4.8 days in 2024** to **5.0 days in the first half of 2025**[74](index=74&type=chunk)[79](index=79&type=chunk) [Trade and Bills Payables](index=14&type=section&id=Trade%20and%20Bills%20Payables) Trade and bills payables increased from RMB 1,499 million to RMB 1,919 million, while turnover days decreased from 33.2 to 30.7 - Trade and bills payables turnover days decreased from **33.2 days in 2024** to **30.7 days in the first half of 2025**[75](index=75&type=chunk)[80](index=80&type=chunk) [Capital Gearing Ratio](index=14&type=section&id=Capital%20Gearing%20Ratio) The capital gearing ratio increased from 11.6% to 14.5%, primarily due to increased use of bills receivable financing - The capital gearing ratio increased to **14.5%**, mainly due to increased utilization of bills receivable financing[76](index=76&type=chunk)[81](index=81&type=chunk) [Treasury Policy](index=15&type=section&id=Treasury%20Policy) The Group maintains a prudent financial management approach to ensure its liquidity structure consistently meets funding requirements - The Group adopts a prudent financial management approach to ensure that the liquidity structure of its assets, liabilities, and other commitments consistently meets its funding requirements[83](index=83&type=chunk)[91](index=91&type=chunk) [Material Events After Reporting Period](index=15&type=section&id=Material%20Events%20After%20Reporting%20Period) No material events occurred from June 30, 2025, up to the report date [Foreign Exchange Risk](index=15&type=section&id=Foreign%20Exchange%20Risk) As of June 30, 2025, the Group held HKD 1,712 million, USD 630 million, and minor other foreign currencies, and will monitor and hedge foreign exchange risk as needed - As of June 30, 2025, the Group held **HKD 1,712 million**, **USD 630 million**, and a small amount of other foreign currencies[85](index=85&type=chunk)[93](index=93&type=chunk) - The Group will closely monitor foreign exchange risks and, if necessary, use appropriate financial instruments for hedging purposes to help mitigate foreign exchange risk[85](index=85&type=chunk)[93](index=93&type=chunk) [Contingent Liabilities](index=15&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities [Capital Commitments](index=15&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments amounted to approximately RMB 3,745 million, primarily for constructing production plants and acquiring equipment - As of June 30, 2025, the Group's capital commitments were approximately **RMB 3,745 million**, primarily for the construction of production plants and the acquisition of production equipment[87](index=87&type=chunk)[95](index=95&type=chunk) [Pledged Assets](index=15&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group had no pledged assets [Material Investments, Acquisitions and Disposals](index=15&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) As of June 30, 2025, and up to the report date, the Group held no material investments and had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures [Future Plans for Material Investments or Capital Assets](index=16&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Group currently has no plans for other material investments or capital assets beyond those disclosed in the prospectus regarding "Future Plans and Use of Proceeds" [Human Resources and Remuneration Policy](index=16&type=section&id=Human%20Resources%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed over 20,000 staff with total employee benefits expenses of RMB 2,187 million, fostering talent development and retention through performance-based incentives and an employee share incentive scheme - As of June 30, 2025, the Group's total number of employees exceeded **20,000**, with total employee benefits expenses for the reporting period amounting to **RMB 2,187 million**[99](index=99&type=chunk)[101](index=101&type=chunk) - The Group's salary and benefits levels are determined with reference to market conditions and individual qualifications and capabilities, establishing incentive mechanisms such as performance bonuses, and utilizing equity incentives and year-end recognition for outstanding contributors[99](index=99&type=chunk)[102](index=102&type=chunk) - The company adopted an employee share incentive scheme in 2022, with a **10-year validity period**, aimed at incentivizing management personnel and core technical experts[103](index=103&type=chunk)[105](index=105&type=chunk) [2022 Share Incentive Grant and Vesting Status](index=17&type=section&id=2022%20Share%20Incentive%20Grant%20and%20Vesting%20Status) All incentive shares granted in March 2022 were fully vested by April 2024 - All incentive shares granted in March 2022 were fully vested by **April 2024**[104](index=104&type=chunk)[106](index=106&type=chunk) [2025 Share Incentive Grant and Vesting Arrangements](index=18&type=section&id=2025%20Share%20Incentive%20Grant%20and%20Vesting%20Arrangements) In March 2025, the company granted 8,118,400 H-share incentive units at HKD 10.20 per share to directors, supervisors, and employees, with vesting scheduled in three tranches in April 2026, 2027, and 2028 - In March 2025, **8,118,400 H-share incentive units** were granted, representing **0.072%** of the total issued shares as of December 31, 2024[107](index=107&type=chunk)[109](index=109&type=chunk) - The grant price was **HKD 10.20 per share**, which was **30%** of the average closing price of the company's H-shares for the 120 Hong Kong trading days prior to the grant date[107](index=107&type=chunk)[109](index=109&type=chunk) - Incentive recipients included **4 directors, 2 supervisors, 9 Yangshengtang Group employees, and 129 Group employees**[107](index=107&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - The incentive shares will vest in three tranches, with **1/3 vesting on the last trading day of April 2026, 2027, and 2028**, respectively[113](index=113&type=chunk) [Environmental, Social and Governance (ESG)](index=22&type=section&id=Environmental%2C%20Social%20and%20Governance%20%28ESG%29) Nongfu Spring integrates ESG principles into its core business, actively supporting rural revitalization, investing in ecological protection, optimizing human resources, ensuring product quality, building a green supply chain, and enhancing corporate governance - The "2024 Nongfu Spring Sustainable Development Report (ESG Report)" was published, comprehensively showcasing the company's sustainable development commitments, actions, and achievements[118](index=118&type=chunk)[120](index=120&type=chunk) - In rural revitalization, the company supports farmers and planting bases through industrial assistance and technological empowerment, providing standardized management services and promoting modern agricultural equipment, earning the title of "National Key Leading Enterprise in Agricultural Industrialization"[119](index=119&type=chunk)[121](index=121&type=chunk) - In ecological protection, the company aims to **reduce greenhouse gas emission intensity by 20% by 2030 compared to 2019** and **reduce water intensity by 20% by 2030**, committing to **100% recyclable plastic packaging for water and beverage products**[122](index=122&type=chunk)[123](index=123&type=chunk) - In product development, the company adheres to the "natural and healthy" philosophy, continuously enriching product categories, launching beverage series based on natural ingredients, and strengthening R&D innovation and quality control across the entire industry chain[125](index=125&type=chunk)[127](index=127&type=chunk) - At the corporate management level, the company continues to optimize its three-tier ESG governance structure led by the Board, improve its sustainable development management system, and ensure comprehensive coverage of business conduct code signing and anti-corruption training[128](index=128&type=chunk)[130](index=130&type=chunk) [Corporate Governance and Other Data](index=26&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E6%95%B8%E6%93%9A) [Compliance with the Model Code for Securities Transactions by Directors](index=26&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Listing Rules' Model Code and its own code for securities transactions, with all directors and supervisors confirming compliance during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, and has formulated its own Code for Securities Transactions by Directors, Supervisors and Relevant Employees[131](index=131&type=chunk)[134](index=134&type=chunk) - All directors and supervisors confirmed compliance with the requirements of the Model Code regarding securities transactions by directors and supervisors during the reporting period[131](index=131&type=chunk)[134](index=134&type=chunk) [Compliance with the Corporate Governance Code](index=26&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company complies with all Corporate Governance Code provisions, except for the combined roles of Chairman and CEO held by Mr. Zhong Shanshan, which the Board believes benefits management and is balanced by the independence of senior management and the Board - The company complies with all provisions of the Corporate Governance Code, except for the deviation where the roles of Chairman and Chief Executive Officer are held by Mr. Zhong Shanshan concurrently[132](index=132&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - The Board believes that Mr. Zhong Shanshan's dual role benefits the company's management, and the senior management and Board (comprising five executive directors, one non-executive director, and three independent non-executive directors) maintain a high degree of independence[132](index=132&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=27&type=section&id=Directors%27%2C%20Supervisors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, the company's directors, supervisors, and chief executive held interests in the company's shares, with Mr. Zhong Shanshan holding a majority stake as a controlling shareholder through controlled corporations and beneficial ownership Directors', Supervisors' and Chief Executive's Interests in the Company (June 30, 2025) | Name | Share Class | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Mr. Zhong Shanshan | Domestic Shares | Interest held by controlled corporation | 6,211,800,000 | 55.2333 | | Mr. Zhong Shanshan | H Shares | Interest held by controlled corporation | 1,310,252,410 | 11.6503 | | Mr. Zhong Shanshan | H Shares | Beneficial owner | 1,929,249,240 | 17.1543 | | Mr. Xiang Xiansong | H Shares | Beneficial owner | 32,400 | 0.0003 | | Mr. Rao Minghong | H Shares | Beneficial owner | 59,400 | 0.0005 | | Mr. Jiang Xiaodong | H Shares | Beneficial owner | 471,250 | 0.0042 | - Ms. Wu Limin, Mr. Xiang Xiansong, Mr. Rao Minghong, Ms. Han Linyou, Ms. Wang Yuan, and Mr. Jiang Xiaodong also held incentive shares granted in March 2025 that had not yet vested[144](index=144&type=chunk) - Mr. Zhong Shanshan directly or indirectly holds **98.38%** interest in the controlling shareholder Yangshengtang, and through Yangshengtang, holds interests in several associated corporations, including Yangshengtang Pharmaceutical and Beijing Wantai Biological Pharmacy Enterprise Co., Ltd[145](index=145&type=chunk)[149](index=149&type=chunk) [Interests in the Company](index=27&type=section&id=Interests%20in%20the%20Company) This section details the interests of the company's directors, supervisors, and chief executive in the company's shares as of June 30, 2025, including Mr. Zhong Shanshan's substantial holdings and other members' H-shares from the employee share incentive scheme - Mr. Zhong Shanshan holds **6,211,800,000 domestic shares** and **1,310,252,410 H-shares** through controlled corporations, and beneficially owns **1,929,249,240 H-shares**, totaling **84.0379%** of the total issued share capital[141](index=141&type=chunk) - Mr. Xiang Xiansong, Mr. Rao Minghong, and Mr. Jiang Xiaodong beneficially hold **32,400, 59,400, and 471,250 H-shares**, respectively[141](index=141&type=chunk) - Ms. Wu Limin, Mr. Xiang Xiansong, Mr. Rao Minghong, Ms. Han Linyou, Ms. Wang Yuan, and Mr. Jiang Xiaodong also hold incentive shares granted in March 2025 that have not yet vested[144](index=144&type=chunk) [Interests in Associated Corporations](index=29&type=section&id=Interests%20in%20Associated%20Corporations) This section discloses Mr. Zhong Shanshan's direct and indirect interests in the company's associated corporations, including Yangshengtang and its non-wholly owned subsidiaries Mr. Zhong Shanshan's Interests in Associated Corporations (June 30, 2025) | Associated Corporation Name | Nature of Interest | Approximate Percentage of Interest (%) | | :--- | :--- | :--- | | Yangshengtang | Beneficial owner | 98.38 | | Yangshengtang | Interest held by controlled corporation | 1.62 | | Yangshengtang Pharmaceutical Co., Ltd. | Beneficial owner | 2.47 | | Yangshengtang Pharmaceutical Co., Ltd. | Interest held by controlled corporation | 97.53 | | Beijing Wantai Biological Pharmacy Enterprise Co., Ltd. | Beneficial owner | 17.70 | | Beijing Wantai Biological Pharmacy Enterprise Co., Ltd. | Interest held by controlled corporation | 55.79 | | Xiamen Youmaike Medical Instrument Co., Ltd. | Interest held by controlled corporation | 63.50 | | Beijing Tairun Innovation Technology Incubator Co., Ltd. | Interest held by controlled corporation | 60.00 | | Jiehetai (Beijing) Biotechnology Co., Ltd. | Interest held by controlled corporation | 94.93 | | Xiamen Yingbomai Biotechnology Co., Ltd. | Interest held by controlled corporation | 60.00 | | Guanzi Management Consulting (Lishui) Partnership (Limited Partnership) | Beneficial owner | 90.00 | | Guanzi Management Consulting (Lishui) Partnership (Limited Partnership) | Interest held by controlled corporation | 10.00 | | Guanzi Equity Investment (Lishui) Partnership (Limited Partnership) | Beneficial owner | 24.81 | | Guanzi Equity Investment (Lishui) Partnership (Limited Partnership) | Interest held by controlled corporation | 74.94 | | Chengguang Management Consulting (Lishui) Partnership (Limited Partnership) | Beneficial owner | 24.81 | | Chengguang Management Consulting (Lishui) Partnership (Limited Partnership) | Interest held by controlled corporation | 74.94 | [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=33&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, substantial shareholder Yangshengtang held interests in the company's domestic shares and H-shares through controlled corporations, totaling 66.8836% of the total issued share capital Substantial Shareholders' Interests in the Company (June 30, 2025) | Name | Share Class | Nature of Interest | Number of Shares Held | Approximate Percentage of Total Issued Share Capital (%) | | :--- | :--- | :--- | :--- | :--- | | Yangshengtang | Domestic Shares | Interest held by controlled corporation | 6,211,800,000 | 55.2333 | | Yangshengtang | H Shares | Interest held by controlled corporation | 1,310,252,410 | 11.6503 | | **Total** | | | **7,522,052,410** | **66.8836** | [Compliance with Laws and Regulations and Legal Proceedings](index=34&type=section&id=Compliance%20with%20Laws%20and%20Regulations%20and%20Legal%20Proceedings) The Group operates primarily in China, adhering to relevant Chinese and Hong Kong laws and regulations, with no material breaches of food safety or environmental laws during the reporting period - The Group's operations are primarily conducted in China, and it complies with relevant laws and regulations in China, Hong Kong, and other regions[158](index=158&type=chunk)[160](index=160&type=chunk) - During the reporting period, the Group had no material violations of food safety and environmental protection laws and regulations[158](index=158&type=chunk)[161](index=161&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities, and no treasury shares were held as of June 30, 2025 [Use of Proceeds from Listing](index=34&type=section&id=Use%20of%20Proceeds%20from%20Listing) As of June 30, 2025, the company utilized approximately HKD 4,901 million (52.3%) of its listing proceeds, with the remaining HKD 4,476 million expected to be used by December 31, 2026, as per the prospectus Use of Proceeds from Listing (As of June 30, 2025) | Purpose | Net Proceeds Available from Listing (HKD million) | Actual Net Proceeds Used (HKD million) | Net Proceeds Unused (HKD million) | Expected Full Utilization Time | | :--- | :--- | :--- | :--- | :--- | | Brand Building | 2,344 | 1,003 | 1,341 | December 31, 2026 | | Acquisition of Sales Facilities | 2,344 | 371 | 1,973 | December 31, 2026 | | Acquisition of Production Facilities and Construction of New Plants | 1,875 | 1,439 | 436 | December 31, 2026 | | Infrastructure Capacity Building | 938 | 212 | 726 | December 31, 2026 | | Loan Repayment | 938 | 938 | 0 | Not Applicable | | Replenishment of Working Capital and Other General Corporate Purposes | 938 | 938 | 0 | Not Applicable | | **Total** | **9,377** | **4,901** | **4,476** | **December 31, 2026** | - The total net proceeds from the listing were approximately **HKD 9,377 million**[164](index=164&type=chunk) - The remaining unused proceeds of approximately **HKD 4,476 million** are expected to be gradually utilized by **December 31, 2026**, in accordance with the purposes disclosed in the prospectus[164](index=164&type=chunk)[166](index=166&type=chunk) [Audit Committee](index=36&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's unaudited interim condensed consolidated results for the six months ended June 30, 2025, confirming compliance with accounting principles and disclosure requirements, with Mr. Gu Chaoyang appointed as the new Chairman - The Audit Committee reviewed the Group's unaudited interim condensed consolidated results for the six months ended June 30, 2025, and confirmed compliance with applicable accounting principles, standards, and requirements, and that adequate disclosures were made[168](index=168&type=chunk)[171](index=171&type=chunk) - Independent non-executive director Mr. Stanley Yi Chang resigned as a member and Chairman of the Audit Committee on March 17, 2025, and Mr. Gu Chaoyang was appointed as Chairman on May 20, 2025[167](index=167&type=chunk)[170](index=170&type=chunk) [Dividends](index=37&type=section&id=Dividends) The company's 2024 final cash dividend of RMB 0.76 per share, totaling approximately RMB 8,547 million, was approved for payment on August 27, 2025, with no interim dividend declared for H1 2025 - The **2024 final cash dividend of RMB 0.76 per share** (tax inclusive, totaling approximately **RMB 8,547 million**) has been approved and will be distributed on **August 27, 2025**[172](index=172&type=chunk)[174](index=174&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[172](index=172&type=chunk)[174](index=174&type=chunk) [Sufficient Public Float](index=37&type=section&id=Sufficient%20Public%20Float) The company obtained a waiver from strict compliance with Listing Rule 8.08(1)(a) and has maintained the required minimum public float since January 1, 2025 - The company obtained a waiver from strict compliance with Listing Rule 8.08(1)(a), requiring a minimum public float of the higher of **13.66% of the total issued share capital** or **14.11% of the H-shares** after the global offering and exercise of the over-allotment option[173](index=173&type=chunk)[175](index=175&type=chunk) - The company has maintained the aforementioned minimum public float required by the Stock Exchange from **January 1, 2025**, up to the date of this interim report[173](index=173&type=chunk)[175](index=175&type=chunk) [Changes in Directors, Supervisors, Senior Management and Board Committee Members](index=38&type=section&id=Changes%20in%20Directors%2C%20Supervisors%2C%20Senior%20Management%20and%20Board%20Committee%20Members) During the reporting period, there were several changes in the company's directors, supervisors, and Board committee members, including resignations and new appointments to key positions such as Audit Committee Chairman and Supervisory Committee Chairman - Mr. Stanley Yi Chang resigned as an independent non-executive director, a member and Chairman of the Audit Committee, and a member of the Nomination Committee on **March 17, 2025**[176](index=176&type=chunk)[178](index=178&type=chunk) - Ms. Yu Minyu and Mr. Liu Xiyue resigned as supervisors on **March 25, 2025**[176](index=176&type=chunk)[178](index=178&type=chunk) - Mr. Gu Chaoyang was elected as an independent non-executive director of the Eighth Board, and Ms. Wang Yuan and Ms. Fan Jinghan were elected as shareholder representative supervisors of the Eighth Supervisory Committee[176](index=176&type=chunk)[178](index=178&type=chunk) - Mr. Zhong Shanshan ceased to be the Chairman of the Nomination Committee, Mr. Yang Lei was appointed as the Chairman of the Nomination Committee, Mr. Gu Chaoyang was appointed as the Chairman of the Audit Committee, and Ms. Wang Yuan was appointed as the Chairman of the Supervisory Committee[176](index=176&type=chunk)[178](index=178&type=chunk) [Independent Review Report](index=39&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) [Independent Review Report](index=39&type=section&id=Independent%20Review%20Report) Ernst & Young reviewed Nongfu Spring's interim condensed consolidated financial information for the six months ended June 30, 2025, concluding that no matters indicated non-compliance with IAS 34 in all material respects - Ernst & Young has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[183](index=183&type=chunk)[185](index=185&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[186](index=186&type=chunk)[187](index=187&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=41&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) [Interim Condensed Consolidated Statement of Profit or Loss](index=41&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, Nongfu Spring reported revenue of RMB 25,622,201 thousand, a 15.6% year-on-year increase, with gross profit of RMB 15,456,430 thousand and profit for the period of RMB 7,622,082 thousand, up 22.1% Interim Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 25,622,201 | 22,173,084 | | Cost of sales | (10,165,771) | (9,140,616) | | Gross Profit | 15,456,430 | 13,032,468 | | Other income and gains, net | 807,547 | 1,039,655 | | Selling and distribution expenses | (5,010,696) | (4,971,457) | | Administrative expenses | (1,067,728) | (913,377) | | Other expenses | (127,414) | (5,536) | | Finance costs | (24,563) | (39,438) | | Profit before tax | 10,033,576 | 8,142,315 | | Income tax expense | (2,411,494) | (1,902,736) | | Profit for the period attributable to owners of the parent | 7,622,082 | 6,239,579 | | Basic and diluted earnings per share | RMB 0.677 | RMB 0.555 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=42&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) [Interim Condensed Consolidated Statement of Comprehensive Income](index=42&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's profit for the period was RMB 7,622,082 thousand. Other comprehensive loss net of tax was RMB 319 thousand, mainly from exchange differences on translating overseas operations. Total comprehensive income for the period was RMB 7,621,763 thousand Interim Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 7,622,082 | 6,239,579 | | Exchange differences on translating overseas operations | (319) | 128 | | Other comprehensive income (loss) for the period, net of tax | (319) | 128 | | Total comprehensive income for the period attributable to owners of the parent | 7,621,763 | 6,239,707 | [Interim Condensed Consolidated Statement of Financial Position](index=43&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Interim Condensed Consolidated Statement of Financial Position](index=43&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities were RMB 32,258,393 thousand, with net assets of RMB 31,370,424 thousand, and a net current liability of RMB 5,611,086 thousand due to increased long-term fixed deposits Interim Condensed Consolidated Statement of Financial Position Key Data (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 37,869,479 | 34,088,438 | | Total current assets | 26,524,390 | 19,071,874 | | Total current liabilities | 32,135,476 | 19,984,737 | | Net current liabilities | (5,611,086) | (912,863) | | Total assets less current liabilities | 32,258,393 | 33,175,575 | | Total non-current liabilities | 887,969 | 888,411 | | Net assets | 31,370,424 | 32,287,164 | | Total equity | 31,370,424 | 32,287,164 | - The Group recorded net current liabilities of **RMB 5,611,086 thousand**, primarily due to an increase in the arrangement of long-term (over one year) fixed deposits[82](index=82&type=chunk)[90](index=90&type=chunk)[191](index=191&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=45&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Interim Condensed Consolidated Statement of Changes in Equity](index=45&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the parent was RMB 31,370,424 thousand, with key changes including a RMB 8,547,314 thousand dividend declaration and RMB 25,417 thousand in share-based payment expenses Interim Condensed Consolidated Statement of Changes in Equity Key Data (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | 32,287,164 | 28,570,905 | | Total comprehensive income for the period | 7,621,763 | 6,239,707 | | Dividends declared | (8,541,144) | (8,434,850) | | Shares repurchased | (22,776) | – | | Share-based payment expenses recognized | 25,417 | 5,516 | | Total equity at end of period | 31,370,424 | 26,401,483 | [Interim Condensed Consolidated Statement of Cash Flows](index=47&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Interim Condensed Consolidated Statement of Cash Flows](index=47&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group generated net cash from operating activities of RMB 10,406,067 thousand, used RMB 6,194,007 thousand in investing activities, and obtained RMB 791,637 thousand from financing activities, resulting in a period-end cash and cash equivalents of RMB 7,323,221 thousand Interim Condensed Consolidated Statement of Cash Flows Key Data (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 10,406,067 | 5,537,057 | | Net cash flows used in investing activities | (6,194,007) | (2,760,521) | | Net cash flows from financing activities | 791,637 | 643,112 | | Increase in cash and cash equivalents | 5,003,697 | 3,419,648 | | Cash and cash equivalents at end of period | 7,323,221 | 7,326,117 | - Net cash flows from operating activities significantly increased, primarily due to higher profit before tax and an increase in other payables and accrued expenses[197](index=197&type=chunk) - Net cash flows used in investing activities increased, mainly due to increased purchases of property, plant and equipment, other non-current assets, and financial assets at fair value through profit or loss[199](index=199&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=49&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Company and Group Information](index=49&type=section&id=Company%20and%20Group%20Information) Nongfu Spring Co., Ltd., established in China in 2001 and listed in Hong Kong in 2020, primarily produces and sells packaged drinking water, beverages, and agricultural products, with Yangshengtang Co., Ltd. as its ultimate controlling company - The company was incorporated in China on **June 27, 2001**, and listed on the Main Board of The Stock Exchange of Hong Kong on **September 8, 2020**[200](index=200&type=chunk)[203](index=203&type=chunk) - The Group's principal activities include the production and sale of packaged drinking water and beverages, as well as the sale of agricultural products[201](index=201&type=chunk)[208](index=208&type=chunk) - The company's holding company and ultimate controlling company is Yangshengtang Co., Ltd., which is incorporated in China[201](index=201&type=chunk)[204](index=204&type=chunk) [Basis of Preparation](index=49&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in RMB under IAS 34; despite a net current liability of RMB 5,611,086 thousand, the Board is confident in the Group's ability to continue as a going concern due to its substantial long-term bank deposits - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and is presented in RMB[202](index=202&type=chunk)[205](index=205&type=chunk) - As of June 30, 2025, the Group recorded net current liabilities of **RMB 5,611,086 thousand**[202](index=202&type=chunk)[206](index=206&type=chunk) - The Board is confident that the Group can fully meet its financial obligations as they fall due, as it holds long-term bank deposits of **RMB 11,504,929 thousand** that are freely convertible into cash[202](index=202&type=chunk)[207](index=207&type=chunk) [Changes in Accounting Policies and Disclosures](index=50&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The adoption of amendments to IAS 21, "Lack of Exchangeability," had no impact on the interim condensed consolidated financial information as the Group's transaction and functional currencies are convertible - The revised International Financial Reporting Standards accounting standard first adopted in this period is the amendment to International Accounting Standard 21, "Lack of Exchangeability"[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - As the currencies in which the Group transacts and the functional currencies used by Group entities to translate into the Group's presentation currency are convertible, these amendments had no impact on the interim condensed consolidated financial information[210](index=210&type=chunk)[212](index=212&type=chunk) [Operating Segment Information](index=50&type=section&id=Operating%20Segment%20Information) The Group reports five operating segments: water, ready-to-drink tea, functional beverages, juice beverages, and other products, with segment performance assessed based on adjusted profit before tax, and ready-to-drink tea generating the highest revenue - The Group is divided into five reportable operating segments: water products, ready-to-drink tea products, functional beverage products, juice beverage products, and other products[213](index=213&type=chunk) Operating Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Revenue (RMB thousand) | Segment Results (RMB thousand) | | :--- | :--- | :--- | | Water Products | 9,442,660 | 3,347,232 | | Ready-to-Drink Tea Products | 10,088,816 | 4,878,633 | | Functional Beverage Products | 2,897,818 | 1,364,366 | | Juice Beverage Products | 2,563,885 | 802,873 | | Other Products | 629,022 | 228,664 | | **Total** | **25,622,201** | **10,621,768** | - Over **99%** of the Group's revenue and operating profit is derived from customers in mainland China, and over **98%** of its non-current assets are located in mainland China[219](index=219&type=chunk)[221](index=221&type=chunk) [Revenue](index=53&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue from customer contracts totaled RMB 25,622,201 thousand, primarily from goods sales, recognized upon fulfilling performance obligations, often involving prepayments, return rights, and sales incentives - For the six months ended June 30, 2025, revenue from customer contracts was **RMB 25,622,201 thousand**, primarily from the sale of goods[224](index=224&type=chunk)[225](index=225&type=chunk) - Revenue is recognized when the performance obligation for the sale and delivery of goods is satisfied, which typically requires prepayments, and some contracts offer rights of return and sales incentive discounts[226](index=226&type=chunk)[227](index=227&type=chunk) [Profit Before Tax](index=54&type=section&id=Profit%20Before%20Tax) The Group's profit before tax was RMB 10,033,576 thousand. This section details the various expenses and income components, including cost of sales, depreciation, employee benefits, and R&D costs Profit Before Tax Components (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 10,165,771 | 9,140,616 | | Depreciation of property, plant and equipment | 1,555,401 | 1,310,254 | | Depreciation of right-of-use assets | 63,665 | 52,287 | | Amortisation of intangible assets | 6,207 | 5,504 | | Employee benefits expense | 2,187,071 | 1,983,090 | | Research and development costs | 118,673 | 140,353 | | Impairment of trade receivables | 16,197 | 9,905 | | Fair value gains on financial assets at fair value through profit or loss | (21,046) | (4,727) | [Income Tax](index=55&type=section&id=Income%20Tax) Income tax expense for the six months ended June 30, 2025, was RMB 2,411,494 thousand, reflecting a standard 25% corporate income tax rate for Chinese subsidiaries, with some enjoying preferential rates or exemptions based on location or agricultural activities Income Tax Expense (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current period expense | 2,644,267 | 2,087,358 | | Under/(over) provision in prior periods | 3,663 | (2,325) | | Deferred | (236,436) | (182,297) | | **Total** | **2,411,494** | **1,902,736** | - The corporate income tax rate for Chinese subsidiaries is generally **25%**, but enterprises located in western China may enjoy a **15% preferential tax rate**[237](index=237&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Newly established enterprises in the Guangxi Free Trade Zone, if eligible, may enjoy a **full exemption from local taxes for five years** and pay income tax at a **9% rate**[238](index=238&type=chunk)[242](index=242&type=chunk) - Some Chinese subsidiaries engaged in agriculture may enjoy tax exemptions for agricultural products[239](index=239&type=chunk)[243](index=243&type=chunk) [Dividends](index=57&type=section&id=Dividends) The company approved a 2024 final dividend of RMB 0.76 per share, totaling RMB 8,547,314 thousand, payable in August 2025, and decided not to propose an interim dividend for the current period Dividends Declared by the Company (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Dividends declared by the Company | 8,547,314 | 8,434,850 | - The **2024 final dividend of RMB 0.76 per share** (totaling **RMB 8,547,314 thousand**) has been approved and will be paid in **August 2025**[254](index=254&type=chunk)[256](index=256&type=chunk) - The Board decided not to propose a dividend for this interim period[254](index=254&type=chunk)[257](index=257&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=58&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) Basic earnings per share for the six months ended June 30, 2025, was RMB 0.677, calculated based on profit attributable to ordinary equity holders and a weighted average of 11,246,218,693 ordinary shares, with diluted EPS reflecting the impact of the employee share incentive scheme - For the six months ended June 30, 2025, basic earnings per share amounted to **RMB 0.677**[189](index=189&type=chunk) - Basic earnings per share is calculated based on a weighted average of **11,246,218,693 ordinary shares**[255](index=255&type=chunk)[258](index=258&type=chunk) - The impact of shares granted under the employee share incentive scheme has been included in the calculation of diluted earnings per share[255](index=255&type=chunk)[259](index=259&type=chunk) [Property, Plant and Equipment](index=59&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired assets at a cost of RMB 4,056,624 thousand and disposed of assets with a net book value of RMB 13,630 thousand, resulting in a net loss on disposal of RMB 9,507 thousand - For the six months ended June 30, 2025, the Group acquired assets at a cost of **RMB 4,056,624 thousand**[260](index=260&type=chunk)[261](index=261&type=chunk) - Assets with a net book value of **RMB 13,630 thousand** were disposed of, resulting in a net loss on disposal of **RMB 9,507 thousand**[260](index=260&type=chunk)[261](index=261&type=chunk) [Long-term Bank Deposits, Cash and Bank Balances and Restricted Funds](index=59&type=section&id=Long-term%20Bank%20Deposits%2C%20Cash%20and%20Bank%20Balances%20and%20Restricted%20Funds) As of June 30, 2025, the Group held RMB 11,504,929 thousand in long-term bank deposits, RMB 14,905,813 thousand in cash and bank balances, and RMB 7,977 thousand in restricted funds, primarily denominated in RMB, USD, and HKD Long-term Bank Deposits, Cash and Bank Balances and Restricted Funds (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Long-term bank deposits | 11,504,929 | 10,630,882 | | Cash at bank | 6,559,163 | 2,002,531 | | Short-term bank deposits | 8,346,650 | 8,719,517 | | Cash and bank balances | 14,905,813 | 10,722,048 | | Restricted funds | 7,977 | 7,677 | | **Total** | **26,418,719** | **21,360,607** | - Restricted funds of **RMB 7,977 thousand** represent letter of credit deposits for equipment purchases and are non-interest bearing[265](index=265&type=chunk)[267](index=267&type=chunk) [Trade and Bills Receivables](index=61&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables amounted to RMB 835,572 thousand, with the majority due within 90 days, representing an increase from December 31, 2024 Ageing Analysis of Trade and Bills Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 745,731 | 522,376 | | 91 to 180 days | 78,571 | 48,511 | | 181 to 365 days | 11,270 | 10,485 | | **Total** | **835,572** | **581,372** | [Trade and Bills Payables](index=61&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables were RMB 1,918,803 thousand, mostly due within 90 days, are non-interest bearing, and generally settled within 90 days Ageing Analysis of Trade and Bills Payables (As of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 1,833,307 | 1,394,397 | | 91 to 180 days | 50,113 | 49,258 | | 181 to 365 days | 25,716 | 32,112 | | Over 1 year | 9,667 | 23,630 | | **Total** | **1,918,803** | **1,499,397** | - Trade and bills payables are non-interest bearing and are generally settled within **90 days**[271](index=271&type=chunk) [Interest-bearing Borrowings](index=62&type=section&id=Interest-bearing%20Borrowings) As of June 30, 2025, total interest-bearing borrowings were RMB 4,419,502 thousand, primarily including short-term borrowings from bills and letter of credit discounting. All borrowings are denominated in RMB and repayable within one year Interest-bearing Borrowings (As of June 30, 2025) | Interest Rate (%) | Maturity | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | | 0.86-1.44 | 2025 | 4,419,502 | – | | 0.30-2.70 | 2024 | – | 3,625,433 | | **Total** | | **4,419,502** | **3,625,433** | - Borrowings primarily include short-term borrowings from bills and letter of credit discounting[276](index=276&type=chunk)[277](index=277&type=chunk) - All interest-bearing borrowings are denominated in RMB and are repayable within **one year**[278](index=278&type=chunk) [Share Capital](index=63&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital comprised 11,246,466,400 ordinary shares, amounting to RMB 1,124,647 thousand, consistent with December 31, 2024 Share Capital (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (11,246,466,400 shares) | 1,124,647 | 1,124,647 | [Employee Share Incentive Scheme](index=63&type=section&id=Employee%20Share%20Incentive%20Scheme) The company adopted an employee share incentive scheme in 2022 to motivate key personnel, granting 8,118,400 restricted H-share units at HKD 10.20 per share in April 2025, with vesting over three years - The company adopted an employee share incentive scheme on **January 14, 2022**, with a **ten-year validity period**, aimed at incentivizing management personnel and core technical experts who play a significant role in the Group's operating performance and future development[280](index=280&type=chunk)[281](index=281&type=chunk) - On **April 15, 2025**, **8,118,400 restricted H-share units** were granted to **144 scheme participants** at a grant price of **HKD 10.20 per share**[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - The incentive shares will vest in three tranches, with **1/3 vesting on the last trading day of April 2026, 2027, and 2028**, respectively[286](index=286&type=chunk) - For the six months ended June 30, 2025, the Group recognized share-based payment expenses of **RMB 25,417 thousand**[289](index=289&type=chunk)[290](index=290&type=chunk) [Commitments](index=65&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments amounted to approximately RMB 3,744,758 thousand, primarily for the construction and acquisition of property, plant, and equipment Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for property, plant and equipment | 3,744,758 | 3,576,498 | [Related Party Transactions](index=66&type=section&id=Related%20Party%20Transactions) During the reporting period, the Group and its ultimate controlling company and fellow subsidiaries engaged in several significant related party transactions, including product sales, service provision, asset purchases, and IT cooperation. These transactions were determined based on prevailing market prices or cost-plus methods. As of June 30, 2025, the Group had outstanding receivables and payables with related parties Transactions with Related Parties (For the six months ended June 30, 2025) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales to related parties | 20,326 | 17,070 | | Payments to related parties | 277,948 | 223,157 | - Paid **RMB 5,705 thousand** for media advertising fees, **RMB 20,483 thousand** for management fees, **RMB 3,425 thousand** for IT license fees, and **RMB 1,277 thousand** for basic R&D and testing services to the ultimate controlling company[294](index=294&type=chunk)[295](index=295&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk)[301](index=301&type=chunk) - Purchased bottle caps, vending machine products, and production raw materials totaling **RMB 191,900 thousand**, and paid **RMB 26,640 thousand** for basic R&D and testing services to fellow subsidiaries[294](index=294&type=chunk)[295](index=295&type=chunk)[298](index=298&type=chunk)[300](index=300&type=chunk) Key Management Personnel Remuneration (For the six months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries | 5,317 | 4,698 | | Performance-based bonuses | 11,522 | 11,741 | | Contributions to pension schemes | 219 | 152 | | Equity-settled share-based payment expenses | 2,442 | 206 | | **Total** | **19,500** | **16,797** | Outstanding Balances with Related Parties (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Balances due from related parties | 9,750 | 1,344 | | Balances due to related parties | 63,599 | 49,211 | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=71&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The carrying amounts of the Group's financial instruments approximate their fair values. Management assesses that the fair values of short-term instruments like cash and trade receivables are similar to their carrying amounts. As of June 30, 2025, financial assets at fair value through profit or loss totaled RMB 4,234,311 thousand, classified as Level 2 - The carrying amounts of the Group's financial instruments approximate their fair values[311](index=311&type=chunk) - Management assesses that the fair values of short-term instruments such as cash and cash equivalents, trade receivables, and trade payables are similar to their carrying amounts[312](index=312&type=chunk) Assets Measured at Fair Value (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | | :--- | :--- | | Financial assets at fair value through profit or loss | 4,234,311 | - Financial assets measured at fair value are categorized as Level 2, using significant observable inputs[316](index=316&type=chunk) [Contingent Liabilities](index=73&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities [Events After the Reporting Period](index=73&type=section&id=Events%20After%20the%20Reporting%20Period) No material events occurred after the reporting period up to the approval date of the unaudited interim condensed consolidated financial statements [Approval of Interim Condensed Financial Information](i

Core Viewpoint - The report from Jianyin International highlights that the upcoming National Day Golden Week in China will significantly boost short-term consumption, particularly benefiting sectors such as tourism, dining, beverages, outdoor sports, and gold-related businesses [1] Group 1: Impact on Sectors - The Golden Week is expected to drive retail sales growth, with a notable increase during the overlapping period of the Mid-Autumn Festival and National Day in 2025, from October 1 to 8 [1] - Key sectors poised to benefit from the consumption surge include tourism, hospitality, retail, dining, jewelry, ready-to-drink beverages, and outdoor sports, driven by rising demand for services, cultural experiences, and leisure activities [1] Group 2: Policy Support - Recent national service consumption boosting policies and regional initiatives are anticipated to extend the consumption growth during the holiday period, creating short-term investment opportunities in the market [1]

Summary of Nongfu Spring Conference Call Company Overview - **Company**: Nongfu Spring - **Industry**: Beverage Industry, specifically bottled water and sugar-free tea Key Points and Arguments Market Performance and Stock Valuation - Nongfu Spring's stock price has shown strong performance, benefiting from short-term data catalysts and the impact of the Wahaha incident, leading to an expected increase in market share in the bottled water segment [2][4] - The company's stock has more than doubled since its lowest point last year, with a year-to-date increase of over 60% in 2025 [4] - Current stock price is expected to reach a PE valuation of approximately 30 times by 2026, with an optimistic estimate of up to 35 times, indicating a potential overall return of 20-25% [2][8] Financial Performance and Projections - For 2025, Nongfu Spring's net profit is projected to be revised up to 15 billion yuan, representing a year-on-year growth of about 25% [2][5] - The company is expected to achieve a revenue growth of around 15% in 2025, with profit growth returning to a normal level of about 15% in 2026 [5][11] - The strong performance in the first half of 2025 is attributed to the low base effect from the previous year and increased revenue in the second half [5][10] Growth Drivers - The growth of sugar-free tea and bottled water is expected to drive overall industry growth, with sugar-free tea showing a faster penetration rate [2][6] - The projected revenue for sugar-free tea in 2025 is around 15 billion yuan, with a long-term target of 20 billion yuan [3][9] - Price reductions in sugar-free tea are anticipated to enhance penetration rates, further driving volume growth [3][9] Competitive Landscape and Market Position - Despite concerns about increased competition potentially affecting profitability, Nongfu Spring is expected to maintain a reasonable profit level and stable revenue growth [10] - The company holds a strong brand presence and recognition, positioning it as a leading player in the growth segment of the beverage market [4][6] Investment Considerations - Investors are encouraged to focus on Nongfu Spring's value as a leading company in the sector, especially after the recent adjustments and the low base effect from previous challenges [8][10] - The overall investment outlook remains positive, with expectations of continued high valuation status due to multiple favorable factors [4][8] Additional Important Insights - The impact of the Wahaha incident has created opportunities for Nongfu Spring to capture additional market share in the bottled water sector [4] - The company's strong brand equity and market position are expected to sustain its growth trajectory in the competitive beverage landscape [6][10]