NONGFU SPRING(09633) 华创证券·2024-08-28 05:13Investment 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]