2024-08-27 10:39Financial 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].