Sou Hu Cai Jing·2025-05-22 13:26Core Viewpoint - Nongfu Spring's CEO, Zhong Shanshan, stated that while the company does not oppose outsourcing, all of its products are currently not suitable for outsourcing due to high dependency on water sources and a highly customized production system [2][4]. Financial Performance - In the previous year, Nongfu Spring reported revenue of 42.896 billion yuan, a year-on-year increase of 0.5%, and a net profit of 12.123 billion yuan, up 0.4% year-on-year [3][6]. - The company's packaged drinking water revenue decreased by 21.3% year-on-year, significantly impacting its market share and brand image [3][8]. - The gross profit for 2024 was 24.916 billion yuan, a decrease of 1.9% from 25.407 billion yuan in 2023, with a gross margin decline from 59.5% to 58.1% [8]. Market Position - Despite challenges, Nongfu Spring maintained its position as the market leader in China's packaged drinking water sector, with a market share that experienced a three-month decline due to organized online attacks [8]. - The tea beverage segment, represented by products like "Oriental Leaf," generated revenue of 16.745 billion yuan, a year-on-year increase of 32.3%, accounting for 39% of total revenue [7][8]. Production and Supply Chain - The company has invested in 14 major water sources and over 30 advanced production bases, emphasizing a high-cost but high-quality and non-replicable production model [4][5]. - Recent projects include significant investments in water source projects, such as 5 billion yuan in the Jiande project and 1.35 billion yuan in the Qingcheng Mountain project [5]. Future Outlook - Zhong Shanshan expressed interest in entering the health water market but noted that no company currently produces authentic Chinese health water [5].