Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The report highlights that the company achieved a revenue of 22.173 billion HKD in the first half of 2024, representing a year-over-year growth of 8.36%, and a net profit of 6.240 billion HKD, also reflecting a year-over-year increase of 8.04% [3][4] - The report emphasizes the strong performance of tea and juice beverages, which are becoming the core growth drivers for the company's beverage business, with tea beverage revenue growing by 59.5% year-over-year [6][7] Summary by Sections Financial Performance - In the first half of 2024, the company's revenue grew by 8.36% year-over-year, driven by the rapid growth of tea and juice products, despite a decline in bottled water sales [3][4] - The gross profit margin decreased by 1.38 percentage points to 58.78%, while the gross profit amount increased by 5.87% year-over-year [3] - The company maintained a net profit margin of 28.14%, with net profit increasing by 8.04% year-over-year [3] Business Segments - Bottled Water: Revenue for bottled water decreased by 18.3% year-over-year to 8.531 billion HKD due to negative impacts from online events affecting brand perception [4] - Tea Beverages: Revenue reached 8.430 billion HKD, with a year-over-year growth of 59.5%, maintaining a compound annual growth rate (CAGR) of 39.43% over three years [6] - Juice Beverages: Revenue increased by 25.4% year-over-year to 2.114 billion HKD, although the profit margin decreased by 5.89 percentage points [6] Financial Projections - The company is projected to achieve total revenues of 47.322 billion HKD, 56.694 billion HKD, and 65.514 billion HKD for the years 2024, 2025, and 2026 respectively [5][7] - Net profit forecasts for the same years are 12.693 billion HKD, 15.624 billion HKD, and 18.590 billion HKD [5][7] - The report suggests a price-to-earnings (PE) valuation range of 30-35 times for 2024, translating to a per-share value range of 33.90-39.55 HKD [7]

Investment Rating - The report maintains a "Hold" rating for Nongfu Spring (09633 HK) [5] Core Views - Nongfu Spring achieved revenue of RMB 22 173 billion in H1 2024, a YoY increase of 8 36% Net profit attributable to shareholders was RMB 6 24 billion, up 8 04% YoY [2] - Tea beverage business maintained strong growth momentum, contributing 38% of total revenue with RMB 8 43 billion in sales, up 59 5% YoY [3] - Packaged water segment was significantly impacted by public opinion, with revenue declining 18 3% YoY to RMB 8 531 billion [3] - Gross margin slightly decreased by 1 38 percentage points to 58 78% due to new product promotions and rising raw material costs [3] - The company continues to innovate with new product launches across various categories [3] Financial Performance - H1 2024 financial highlights: - Revenue: RMB 22 173 billion (+8 36% YoY) [2] - Net profit: RMB 6 24 billion (+8 04% YoY) [2] - Gross margin: 58 78% (-1 38pct YoY) [3] - Net margin: 28 14% (-0 08pct YoY) [3] - 2024-2026 financial forecasts: - Revenue: RMB 46 768/54 420/61 760 billion [4] - Net profit: RMB 12 968/15 358/17 647 billion [4] - EPS: RMB 1 15/1 37/1 57 [4] - P/E: 24/20/18x [4] Business Segments - Tea beverages: - Revenue: RMB 8 43 billion (+59 5% YoY) [3] - Contribution to total revenue: 38% (+12 2pct YoY) [3] - Packaged water: - Revenue: RMB 8 531 billion (-18 3% YoY) [3] - Contribution to total revenue: 38 47% (-12 5pct YoY) [3] - Other segments: - Functional drinks: RMB 2 55 billion (+3 8% YoY) [3] - Juice drinks: RMB 2 114 billion (+25 4% YoY) [3] - Others: RMB 548 million (-7 3% YoY) [3] Product Innovation - New product launches in H1 2024: - Packaged water: Pure water and edible ice [3] - Water-soluble C100: Blood orange flavor [3] - Teaπ: Jasmine lemon tea flavor [3] - Jianjiao: Calcium lactate and theanine flavors [3] Valuation Metrics - Current price: HKD 27 55 [5] - Market cap: HKD 138 705 06 million [5] - P/E (2024E): 24x [4] - P/B (2024E): 9 4x [4] - EV/EBITDA (2024E): 15x [7]

Investment Rating - The report maintains a "Buy" rating for Nongfu Spring (9633 HK) with a target price of HKD 34 20 [1] Core Views - Nongfu Spring achieved revenue of RMB 22 17 billion in H1 2024, a YoY increase of 8 4%, and net profit attributable to shareholders of RMB 6 24 billion, up 8 0% YoY [2] - The packaging water segment faced pressure due to negative public opinion, with sales dropping 18 3% YoY to RMB 8 53 billion, while tea beverages surged 59 5% YoY to RMB 8 43 billion, driven by the health and low-sugar trend [2] - Gross margin declined by 1 4 percentage points to 58 8% in H1 2024, mainly due to promotional activities for new products and rising costs [2] - The company launched a green-bottled purified water product in April 2024, enhancing its competitiveness in the packaged water market [2] - Nongfu Spring is expected to achieve net profits of RMB 13 56 billion, RMB 16 28 billion, and RMB 18 95 billion in 2024, 2025, and 2026, respectively, with EPS of RMB 1 21, RMB 1 45, and RMB 1 68 [2] Business Segment Analysis Packaged Water - Sales revenue for packaged water in H1 2024 was RMB 8 53 billion, down 18 3% YoY, accounting for 38 5% of total revenue [2] - The decline was primarily due to negative public opinion and malicious attacks on the company and its founder in late February 2024 [2] - The green-bottled purified water product is expected to drive future growth in this segment [2] Tea Beverages - Tea beverage sales grew 59 5% YoY to RMB 8 43 billion, driven by the popularity of low-sugar and healthy products like Oriental Leaf and Tea π [2] - New flavors and product specifications for Oriental Leaf were introduced, further solidifying its market position [2] Functional Beverages - Functional beverage sales increased 3 8% YoY to RMB 2 55 billion, with new flavors of Scream and Vitamin Water targeting the youth market through collaborations with outdoor and street dance events [2] Juice Beverages - Juice beverage sales rose 25 4% YoY to RMB 2 11 billion, supported by product upgrades and new flavor expansions for brands like Nongfu Orchard and Water Soluble C100 [2] Other Products - Sales of other products declined 7 2% YoY to RMB 550 million, as the company focused on operational efficiency and key product categories [2] Financial Forecasts - Revenue is projected to grow to RMB 47 59 billion, RMB 55 53 billion, and RMB 62 41 billion in 2024, 2025, and 2026, respectively, with YoY growth rates of 11 5%, 16 7%, and 12 4% [2][6] - Net profit margins are expected to remain strong at 28 1% in 2024, with slight improvements in subsequent years [2] - The company's ROE is forecasted to be 19 6%, 14 47%, and 11 95% for 2024, 2025, and 2026, respectively [2] Valuation - The report values Nongfu Spring at 26x PE for 2024, translating to a target price of HKD 34 20 based on a 0 92:1 exchange rate [2][8] - Comparable companies include Dongpeng Beverage, Xiangpiaopiao, and Uni-President China, with average PE multiples of 20x, 17x, and 14x for 2024, 2025, and 2026, respectively [8][9]

[ T able_StockInfo] 2024 年 08 月 29 日 证券研究报告•2024 年中报点评 买入 （维持） 当前价：27.05 港元 农夫山泉（9633.HK）食品饮料 目标价：34.20 港元 包装水短期承压，茶饮加速放量 [Table_Summary 事件：公司发布] 2024 年中报，24H1 实现营收 221.7 亿元，同比+8.4%；归母 净利润 62.4 亿元，同比+8.0%。 包装水受舆论攻击影响承压，茶饮受益于无糖风潮维持高增。分品类看，包装 水、茶饮料、功能饮料、果汁饮料、其他产品分别实现销售收入 85.3 亿元 （-18.3%）、84.3亿元（+59.5%）、25.5亿元（+3.8%）、21.1亿元（+25.4%）、 5.5 亿元(-7.2%)，分别占总营收的 38.5%/38.0%/11.5%/9.5%/2.5%。其中，包 装水下降较多主因 2 月底网络出现大量对公司和创始人的舆论攻击和恶意诋毁 影响品牌销售。茶饮料中东方树叶及茶π两大单品在健康化、低糖化趋势下快 速放量，第二曲线逐步夯实，东方树叶新口味新规格研发上市。功能饮料一方 面推出尖叫新口味注入品牌活力，另一方 ...

收盘价 目标价 潜在涨幅 港元 27.05 港元 33.74↓ +24.7% 农夫山泉 (9633 HK) 如何看待绿瓶水和红瓶水的格局？公司于今年 4 月份上市纯净水产品（即 绿瓶水），目前仍处于消费者宣传和终端促销的过程。由于上市时间较短 且产品仅有一种规格（550ml），因此带给公司整体业绩影响有限。同时， 天然水和纯净水有不同的使用目的和场景，因此在各自对应的消费需求领 域存在各自的增长空间。公司计划通过品类差异化的宣传和渠道的建设推 广，以保证两个产品的健康增长。 2024 上半年收入利润均实现高个位数增长。2024 年上半年农夫山泉销售 额同比增长 8.44%至 221.7 亿元（人民币，下同）。毛利率同比下降 1.4 个 百分点至 58.8%，主因 1）纯净水产品新品上市促销的影响，2）上半年包 装饮用水产品销量下降带来固定成本分摊费用的上升，3）果汁原料价格 上升，各因素影响程度较为均衡。净利润同比增长 8.0%至 62.4 亿元，对 应净利润率为 28.1%，仍处高位（2023 年上/下半年分别为 28.2%/ 28.4%）。 包装饮用水业务受舆论影响而显著下滑；茶饮和果汁业务表现亮眼。尽管 ...

农夫山泉(9633 HK) 1H24 错过 ， 茶叶成为最大的利润贡献者 农夫的 1H24 收入 由于包装水部门市场份额下滑，公司未能达到其指引。我 们预计该部门的收入增长率将保持在低个位数，因为市场份额的恢复需要时间 。茶饮料部门的收入同比增长59%，其收入份额接近水类的38%，营业利润率 （OPM）比水类高10个百分点。茶饮料取代了包装水成为公司的主要利润驱 动因素。鉴于下半年不利的环境和管理层态度的软化，我们认为公司在2024财 年实现两位数收入增长的目标具有挑战性。基于2024财年市盈率40倍，我们 将目标价下调13%至50.38港元，以反映较低的盈利预测。维持买入评级。 水部门受到市场份额损失的伤害 2024年上半财年（1H24）收入同比增长8.4 %，低于预期，主要是由于包装水业务收入同比下降18%，原因是在2月因网 上谣言导致品牌受损后市场占有率下降。公司观察到7月和8月市场占有率有所 恢复，但要回到2月前的水平还需要时间。我们预计全年包装水业务收入将实 现个位数低增长，这反映了中大型水业务增长对小型水业务下滑的部分抵消作 用。包装水业务的营业利润率（OPM）较上年同期下降了4.2个百分点，这是 ...

Nongfu Spring (9633 HK) 1H24 missed, tea became top profit contributor Nongfu's 1H24 revenue missed company's guidance given its market share loss in the packaged water segment. We expect low single digit revenue growth for the segment since market share recovery takes time. Tea beverage revenue grew 59% YoY and delivered revenue share close to water of 38%, with a 10ppt higher in OPM than water segment. The tea beverage replaced the packaged water and became the company's top profit driver. We think that i ...

Investment Rating - The investment rating for the company is "Buy" [7] Core Insights - The company's revenue and profit for the first half of 2024 met market expectations, driven by strong growth in ready-to-drink tea products [10] - The report anticipates revenue growth for 2024-2026 at 8.00%, 13.12%, and 11.00% respectively, with net profit growth at 2.26%, 15.27%, and 11.21% respectively, indicating a three-year CAGR of 9.44% [3][10] Financial Performance Summary - For H1 2024, the company achieved revenue of 22.173 billion yuan, a year-on-year increase of 8.36%, with a gross profit of 13.032 billion yuan, up 5.87%, and a net profit attributable to shareholders of 6.240 billion yuan, up 8.04% [10] - Revenue breakdown for H1 2024 includes water products at 8.531 billion yuan, ready-to-drink tea at 8.430 billion yuan, functional drinks at 2.550 billion yuan, juice drinks at 2.114 billion yuan, and other products at 0.548 billion yuan, with ready-to-drink tea showing a significant increase in revenue share [10] - The report notes a decline in revenue and profit for packaged water products, while ready-to-drink tea performed exceptionally well, with a revenue increase of 59.47% [10] Future Projections - The projected revenues for 2024, 2025, and 2026 are 46.079 billion yuan, 52.123 billion yuan, and 57.855 billion yuan respectively, with corresponding net profits of 11.408 billion yuan, 13.150 billion yuan, and 14.624 billion yuan [10][12] - The company is expected to maintain a stable net profit margin around 28.14% for H1 2024, with a slight decrease from the previous year [10] Valuation Metrics - The projected P/E ratios for 2024, 2025, and 2026 are 30, 26, and 23 respectively, indicating a favorable valuation outlook [3][10]

Investment Rating - Maintain "Recommend" rating with a target price of HKD 36.0 [1][2] Core Views - The company achieved H1 2024 revenue of RMB 22.17 billion, up 8.4% YoY, and net profit of RMB 6.24 billion, up 8.0% YoY [1] - Packaged water revenue declined by 18.3% YoY to RMB 8.53 billion due to a public opinion incident, while beverage revenue grew 36.1% YoY to RMB 13.64 billion [1] - Ready-to-drink tea segment maintained a high growth rate of 59.5% YoY, driven by the success of the Dongfang Leaf and Teaπ brands [1] - Gross margin decreased by 1.38 percentage points to 58.8% due to increased competition in packaged water and rising raw material costs for juice [1] - Net profit margin remained stable at 28.1% YoY, supported by optimized expense ratios [1] Financial Performance - H1 2024 operating income: RMB 22.17 billion (+8.4% YoY) [1] - H1 2024 net profit: RMB 6.24 billion (+8.0% YoY) [1] - Packaged water revenue: RMB 8.53 billion (-18.3% YoY) [1] - Beverage revenue: RMB 13.64 billion (+36.1% YoY) [1] - Ready-to-drink tea revenue: RMB 8.43 billion (+59.5% YoY) [1] - Functional beverage revenue: RMB 2.55 billion (+3.8% YoY) [1] - Juice revenue: RMB 2.11 billion (+25.4% YoY) [1] Product Strategy - The company launched green-bottled purified water to stabilize market share and expand into the purified water market [2] - Dongfang Leaf continued to lead in the ready-to-drink tea segment with a 900ml product matrix [1] - Nongfu Orchard upgraded its products to align with health trends, and ShuRongC introduced new blood orange flavors [1] Market Outlook - Short-term pressure on packaged water is expected to continue due to promotional activities for green-bottled water [2] - Long-term growth potential remains strong in the packaged water and ready-to-drink tea segments [2] - The company's ability to innovate and launch new products continues to be validated [2] Financial Forecasts - 2024E revenue: RMB 44.72 billion (+4.8% YoY) [3] - 2024E net profit: RMB 12.52 billion (+3.6% YoY) [3] - 2025E revenue: RMB 51.11 billion (+14.3% YoY) [3] - 2025E net profit: RMB 14.36 billion (+14.7% YoY) [3] - 2026E revenue: RMB 57.73 billion (+13.0% YoY) [3] - 2026E net profit: RMB 16.27 billion (+13.3% YoY) [3]

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 22,173 million, an increase of 8.4% year-on-year[2]. - Profit attributable to equity holders of the parent company was approximately RMB 6,240 million, reflecting an 8.0% year-on-year growth[2]. - Basic earnings per share increased to RMB 0.55, up 8.0% compared to RMB 0.51 in the same period last year[2]. - Gross profit for the period was RMB 12,309 million, with a gross margin improvement noted[2]. - The company recorded a net profit before tax of RMB 8,142 million, compared to RMB 7,524 million in the previous year[2]. - The total comprehensive income attributable to equity holders for the period was RMB 6,240 million, compared to RMB 5,776 million in the previous year[3]. - The adjusted profit before tax for the group was RMB 8,142,315 thousand for the six months ended June 30, 2024, compared to RMB 7,524,304 thousand for the same period in 2023, indicating an increase of about 8.2%[11]. - The group’s total segment profit for the six months ended June 30, 2024, was RMB 8,168,756 thousand, compared to RMB 7,723,684 thousand for the same period in 2023, reflecting a growth of approximately 5.8%[11]. - Profit for the period increased by 8.0% to RMB 6,240 million, compared to RMB 5,775 million in the same period last year[47]. Revenue Breakdown - The group generated over 99% of its revenue and operating profit from customers in mainland China, with over 99% of identifiable assets and liabilities also located in mainland China[12]. - The group operates five reportable segments: water products, ready-to-drink tea, functional beverages, juice beverages, and other products[8]. - The revenue from packaged drinking water products decreased by 18.3% year-on-year, accounting for 38.5% of total revenue[34]. - The revenue from beverage products increased by 36.7% year-on-year, representing 61.1% of total revenue[32]. - The functional beverage product revenue increased by 59.5% year-on-year, reaching RMB 2,550 million[33]. - The juice beverage product revenue showed a slight increase of 3.8% year-on-year, totaling RMB 2,114 million[33]. - The tea beverage segment recorded revenue of RMB 8,430 million, a year-on-year increase of 59.5%, accounting for 38.0% of total revenue[37]. - The functional beverage segment achieved revenue of RMB 2,550 million, representing a 3.8% year-on-year growth, and contributed 11.5% to total revenue[38]. - The juice beverage segment generated revenue of RMB 2,114 million, with a year-on-year increase of 25.4%, making up 9.5% of total revenue[39]. - The other products segment, including soda and coffee beverages, reported revenue of RMB 548 million, a decline of 7.3% year-on-year, accounting for 2.5% of total revenue[40]. Assets and Liabilities - Non-current assets totaled RMB 32,022 million as of June 30, 2024, up from RMB 20,676 million at the end of 2023[4]. - Current liabilities increased to RMB 28,994 million, compared to RMB 19,877 million at the end of 2023[5]. - Trade receivables as of June 30, 2024, amounted to RMB 703,194,000, compared to RMB 547,021,000 at the end of 2023, representing an increase of approximately 28.5%[26]. - Trade payables as of June 30, 2024, were RMB 1,859,344,000, compared to RMB 1,770,098,000 at the end of 2023, reflecting an increase of approximately 5.0%[28]. - As of June 30, 2024, the company's long-term bank deposits, pledged deposits, cash, and bank balances totaled RMB 27,136 million, a 5.8% increase from RMB 25,639 million at the end of 2023[48]. - Inventory increased from RMB 3,092 million to RMB 3,337 million, with inventory turnover days rising from 55.0 days to 64.2 days[49]. Expenses and Costs - Employee benefits expenses amounted to RMB 1,670,326,000, with wages and salaries contributing RMB 307,258,000, compared to RMB 1,600,359,000 in the previous year[16]. - Research and development costs were RMB 93,749,000, down from RMB 127,082,000 in the prior year, indicating a decrease of approximately 26.2%[16]. - Selling and distribution expenses rose to RMB 4,971 million, a 5.9% increase from RMB 4,695 million in the previous year, accounting for 22.4% of total revenue, down from 22.9%[44]. - Administrative expenses decreased by 4.8% to RMB 913 million, representing 4.1% of total revenue, slightly down from 4.7%[45]. - Other income and gains increased by 15.4% to RMB 1,040 million, primarily due to increased interest income from fixed deposits[46]. Dividends and Shareholder Returns - The group declared a final dividend of RMB 0.75 per share, totaling RMB 8,434,850,000, which will be paid in August 2024[23]. - The company declared a final cash dividend of RMB 0.75 per share, totaling approximately RMB 8,435 million, to be distributed on August 28, 2024[48]. Corporate Governance and Compliance - The audit committee has reviewed the unaudited interim results for the six months ending June 30, 2024, confirming compliance with applicable accounting principles and sufficient disclosures[71]. - The company has adhered to all provisions of the Corporate Governance Code since January 1, 2024, except for a specific deviation regarding the separation of roles between the chairman and the CEO[72]. - The board consists of five executive directors, one non-executive director, and three independent non-executive directors, ensuring a high level of independence in management[73]. - The company has adopted the Standard Code for Securities Transactions by Directors and confirmed compliance by all directors and supervisors during the reporting period[74]. Strategic Initiatives and Future Plans - The company has signed an investment agreement with the government of Jinhua City, Zhejiang Province, with a total planned investment of RMB 5 billion for the "Nongfu Spring Jinhua Drinking Water and Beverage Comprehensive Industrial Base Project"[57]. - The company plans to use the remaining IPO proceeds for brand building, purchasing sales equipment, and constructing new production facilities, with expected completion by December 2026[67]. - The company will continue to sell forfeited shares in the open market, with proceeds used for future incentive share purchases[65]. - The company plans to gradually utilize the net proceeds from the listing by December 31, 2026, due to uncertainties in the post-pandemic economic recovery and geopolitical changes[68]. - The board believes that extending the expected time for utilizing the listing proceeds will not significantly adversely affect the existing business and operations[69]. Market and Economic Context - In the first half of 2024, the GDP of China reached RMB 61.7 trillion, growing by 5.0% year-on-year[31]. - The total retail sales of consumer goods in China amounted to RMB 23.6 trillion, reflecting a year-on-year growth of 3.7%[31]. Brand and Product Development - The group launched a new "Nongfu Spring" purified water product in April 2024, marking its return to the purified water segment after 24 years[35]. - The company launched a new 19-liter PET bottled natural water product in January 2024, enhancing customer service experience[36]. - The company introduced new flavors in its tea beverage line, including a limited edition "Longjing New Tea," which sold out rapidly[37]. - The company expanded its product offerings with the launch of "Farmer's Ice," leveraging its natural water source advantage[36]. - The company continues to focus on enhancing brand value through innovative marketing strategies and product upgrades[38]. - The company emphasized its commitment to social responsibility and sustainable practices in a recent media appearance by its founder[41]. Legal and Regulatory Matters - The group has taken legal action against malicious rumors affecting its brand and sales since late February 2024[35]. - The group has not experienced any significant events after the reporting period up to the approval date of the interim financial statements[29].