Haitong Securities International·2025-08-27 14:42Investment Rating - The report maintains an "Outperform" rating for Nongfu Spring [2][5]. Core Insights - Nongfu Spring has returned to double-digit growth, with H1 2025 revenue reaching RMB 25.622 billion, a year-on-year increase of 15.6%, and a net profit of RMB 7.622 billion, up 22.1% [3][10]. - The packaged water business has rebounded, generating RMB 9.443 billion in revenue, a 10.7% increase year-on-year, as the impact of previous public opinion issues fades [11][3]. - The tea beverage segment has shown remarkable performance, achieving RMB 10.089 billion in revenue, a 19.7% increase, making it the largest revenue segment [12][4]. - Efficient expense management has led to improved profit quality, with a gross profit margin of 60.3% in H1 2025, up 1.5 percentage points year-on-year [13][4]. Financial Forecast - Revenue projections for 2025-2027 are RMB 49.95 billion, RMB 56.64 billion, and RMB 63.72 billion, with year-on-year growth rates of 16.4%, 13.4%, and 12.5% respectively [14][5]. - Expected net profits for the same period are RMB 14.44 billion, RMB 16.19 billion, and RMB 18.20 billion, corresponding to EPS of RMB 1.28, RMB 1.44, and RMB 1.62 [14][5]. - The company's ROE is among the top tier in the industry, justifying a valuation premium with a target price set at HKD 55.9 for 2025 [14][5].