[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]

Core Insights - The iced tea market is experiencing intense competition in 2025, with major brands like Nongfu Spring, JDB, Wahaha, and Dongpeng Beverage increasing their investments, while established players like Master Kong and Uni-President are also preparing for battle [1][2]. Market Dynamics - Master Kong, as the market leader, is facing significant competition but is actively launching new low-sugar flavors and leveraging celebrity endorsements to maintain its market position [2][3]. - Despite Master Kong's strong brand presence, its market share has been declining, with figures showing a drop from 22.82% in July 2024 to 22.01% in August 2025 [3][4]. - The company's revenue from beverage sales decreased by 2.6% year-on-year in the first half of 2025, attributed to price increases that have pressured retailers and reduced profit margins [4][5]. Competitive Landscape - Uni-President has benefited from Master Kong's challenges, with its market share rising from 5.68% to 7.26% between January 2024 and August 2025, alongside a 7.6% increase in beverage revenue [10][11]. - New entrants like Nongfu Spring and Wahaha are employing differentiated strategies to capture market share, with Nongfu Spring launching a carbonated iced tea and investing 2 billion yuan in R&D [12][15]. - The competitive landscape is shifting, with brands like Wahaha and Dongpeng gaining traction, as evidenced by increased sales and market share [13][15]. Promotional Strategies - Brands are engaging in aggressive promotional activities, such as discounts and giveaways, to attract consumers, with Master Kong and Uni-President also participating in these marketing tactics [17][18]. - The "1 yuan enjoyment" campaign has proven effective in boosting sales for brands like Dongpeng, which reported a 36.37% increase in revenue in the first half of 2025 [18]. Future Outlook - The iced tea market is expected to continue evolving with ongoing competition among established and new brands, potentially leading to significant changes in market dynamics [18].

Group 1 - The core project of Nongfu Spring's natural drinking water and beverage production base in Haikou is progressing, with workers currently engaged in the main steel structure installation [1][3] - The project is scheduled for overall completion by March 2026 and will introduce sterile filling beverage production lines and injection molding systems [3] - The facility aims to become a benchmark factory characterized by digitalization and greenness [3]

Group 1 - As of September 19, 93 stocks reached their 52-week highs, with Huake Intelligent Investment (01140), Xincheng Power (01148), and Huashang Energy (00206) leading the increase rates at 22.30%, 20.00%, and 17.65% respectively [1] - The closing prices for the top three stocks that reached new highs are Huake Intelligent Investment at 0.170, Xincheng Power at 0.300, and Huashang Energy at 0.305 [1] - Other notable stocks that reached new highs include Handa Fu Holdings (01348) with a high rate of 16.89% and Meijiehui Holdings (01389) at 13.75% [1] Group 2 - The report also lists stocks that reached their 52-week lows, with Shanga Holdings (00412) experiencing the largest decline at -34.98%, followed by Huaying Construction (01582) at -21.47% [3] - The closing price for Shanga Holdings is 3.360, while Huaying Construction closed at 0.360 [3] - Other stocks with significant declines include China Information Technology Equity (08568) at -17.74% and Tai Hing Properties (00277) at -11.90% [3]

Investment Rating - The report provides a positive investment rating for the low-alcohol and beverage sectors, recommending specific companies based on their performance and market positioning [2]. Core Insights - The report emphasizes the structural recovery in the consumer goods sector, highlighting the importance of channel dynamics and product innovation in driving growth [2][25]. - It identifies key players in the beer segment, such as Yanjing Beer and Zhujiang Beer, which are expected to outperform due to their strong regional presence and operational efficiency [2][11]. - The report also notes the challenges faced by the seasoning and food supply sectors, particularly due to weak downstream demand, but suggests potential for recovery as the restaurant industry stabilizes [2][26]. Summary by Sections Beer Sector - The beer sector experienced a revenue of 41.73 billion yuan in the first half of 2025, with a year-on-year growth of 2.8% [7]. - Major companies like Qingdao Beer and China Resources Beer showed mixed performance, with Qingdao Beer achieving a revenue increase of 1.9% [11][12]. - The report highlights the impact of channel structure on revenue performance, with companies like Yanjing and Zhujiang benefiting from a higher proportion of non-immediate sales channels [11][12]. Yellow Wine Sector - The yellow wine sector reported a revenue of 1.93 billion yuan in the first half of 2025, reflecting a year-on-year growth of 3.4% [26]. - Kuaijishan, a leading player, achieved a double-digit growth rate of 11% in the same period, driven by its high-end and youth-oriented strategies [26][27]. - The report indicates a trend of market share concentration among leading companies, with Kuaijishan and Guyue Longshan capturing a larger portion of the market [31]. Seasoning and Food Supply Sector - The seasoning and food supply sector faced revenue pressure due to weak restaurant demand, but companies that successfully launched new products or expanded channels showed resilience [2][26]. - The report suggests that a recovery in restaurant demand could lead to increased supply chain needs, benefiting leading companies in the sector [2][26]. Beverage Sector - The beverage sector is highlighted for its high growth potential, particularly for companies like Dongpeng Beverage, which is expanding its national presence [2]. - The report recommends focusing on companies that are effectively navigating the competitive landscape and capitalizing on emerging consumer trends [2][26].

Investment Rating - The report rates the industry as "Outperform the Market" [3][20]. Core Insights - The white liquor sector is expected to see a weak recovery in demand as policy pressures ease, with a notable narrowing of year-on-year declines anticipated during the upcoming double festival sales [2]. - The food and beverage industry is currently at a low valuation, with pessimistic expectations fully priced in, and the release of interim results is expected to alleviate performance pressures [2]. - The report highlights the potential for premium liquor companies like Kweichow Moutai, Wuliangye, and Shanxi Fenjiu, which have stable pricing and attractive dividend yields, to be favored during this adjustment period [2]. - In the mass consumer goods segment, companies like Nongfu Spring and Dongpeng Beverage are recommended due to their strong growth trajectories and the market's willingness to assign valuation premiums to "scarce" growth stocks [2]. Summary by Sections Weekly Tracking - The food and beverage industry increased by 1.08% in the week of September 8-12, underperforming the Shanghai Composite Index, which rose by 1.52% [3][4]. - Among sub-sectors, meat products led with a gain of 2.99%, while snacks saw a decline of 4.60% [3][6]. Dairy Sector - The nationwide rollout of childcare subsidies is expected to boost demand for dairy products, particularly infant formula, benefiting leading companies with strong brand advantages and diversified distribution channels [3]. Snack Sector - The rapid expansion of the snack chain "Mingming Hen Mang" has surpassed 20,000 stores, indicating a shift towards a more competitive and cost-effective sales model that aligns with current consumer trends [3]. Restaurant Sector - The launch of the "Gaode Street Ranking" by Gaode Map is anticipated to enhance the vitality of offline dining by leveraging user behavior data for merchant evaluations, which may benefit restaurant supply chain companies [3].

Group 1: Hang Seng Index (HSI) - Investors are optimistic about the Hang Seng Index continuing to rise, with bull certificates having a redemption price of 25,330, while some investors are hedging with bear certificates at a redemption price of 26,600 [1] - The closing price on Monday was 26,446, above the upper Bollinger Band at 26,442, with a technical signal summarized as "sell," indicating a higher probability of a short-term decline [1] - Support levels are identified at 25,779 and 25,348, while resistance levels are at 26,700 and 27,500 [1] Group 2: Contemporary Amperex Technology Co., Limited (CATL) - CATL reached a new high, with investors speculating whether the stock could hit 500 HKD this month; the stock peaked at 476.8 HKD and closed at 465 HKD [7] - Technical analysis indicates resistance levels at 505 HKD and 510 HKD, with a summarized signal of "sell," suggesting potential for a decline [7] Group 3: BYD Company Limited - BYD's stock closed at 108.1 HKD, near the middle line of the Bollinger Band, with a technical signal summarized as "buy," indicating a slight bullish outlook [13] - Resistance levels are at 113.6 HKD and 118.3 HKD, while support levels are at 103.2 HKD and 97.9 HKD [14] Group 4: Alibaba Group Holding Limited - Alibaba's stock showed decent rebound strength, but technical analysis suggests a "sell" signal, with resistance levels at 159.8 HKD and 180 HKD [18] Group 5: Nongfu Spring Co., Ltd. - Nongfu Spring's stock reached a new high of 54.5 HKD, with technical analysis indicating a "sell" signal and support levels at 51.2 HKD and 49.3 HKD [23] Group 6: JD.com, Inc. - JD.com's stock closed at 131.7 HKD, with support levels at 125 HKD and 119 HKD; bear certificates have a redemption price of 141.5 HKD, with resistance levels at 137.3 HKD and 144.3 HKD [29]

Core Viewpoint - Zhong Shanshan, known as the "bottled water king," has regained the title of China's richest person after overcoming a significant public relations crisis and a decline in his wealth due to controversies surrounding his company, Nongfu Spring [1][3][5]. Group 1: Wealth Fluctuations - Zhong Shanshan held the title of China's richest person for three consecutive years since 2021 but lost it in 2024 due to a significant drop in his wealth amid public scrutiny and fluctuating company performance [1]. - Following the "Wahaha incident," Nongfu Spring faced severe public backlash, leading to a substantial decline in brand reputation and sales, which negatively impacted Zhong's personal wealth [3]. Group 2: Recovery and Growth - As public sentiment improved and rumors dissipated, Nongfu Spring's sales began to recover, with the company's tea beverage revenue surpassing 10 billion yuan for the first time, reaching 10.09 billion yuan, a year-on-year increase of 19.7% [5]. - The company's functional beverages and juice segments also saw growth, with functional drinks generating nearly 2.9 billion yuan (up 13.6%) and juice drinks reaching 2.56 billion yuan (up 21.3%) [5]. Group 3: Business Strategy and Investments - Zhong Shanshan's wealth accumulation is driven by a dual strategy of "industry + capital," with significant investments in various sectors through his holding company, Yangshengtang, and private equity funds [7]. - His investment in Wantai Biological Pharmacy, where he holds a 75.15% stake, is particularly noteworthy, as the company is poised to increase its market value significantly with the launch of its domestically produced HPV vaccine [7]. Group 4: Future Prospects - Zhong Shanshan's return to the top of the wealth rankings signifies a new era for his diversified wealth empire, as he continues to leverage product and market strategies to validate his status as a billionaire [8].