Core Viewpoint - Nongfu Spring has reported a mixed performance in 2024, with revenue growth but a decline in gross margin, highlighting the impact of market dynamics and product shifts in the beverage sector [4][5]. Financial Performance - In 2024, Nongfu Spring's revenue reached 42.896 billion yuan, a year-on-year increase of 0.5%, while net profit attributable to shareholders was 12.123 billion yuan, up 0.4% [4]. - The gross margin decreased from 59.5% in 2023 to 58.1% in 2024, attributed to promotional impacts from new pure water products, a decline in bottled water sales, and rising juice raw material prices [4]. Product Segment Analysis - For the first time, revenue from tea beverages surpassed that of bottled water, with tea beverages accounting for 39% and bottled water 37.2% of total revenue in 2024, compared to 29.7% and 47.5% respectively in 2023 [4][6]. - Bottled water revenue fell significantly by 21.3% to 15.952 billion yuan in 2024, losing 4.3 billion yuan compared to 2023 [4]. Growth Drivers - Tea beverages emerged as a new growth driver, with revenue increasing by 32.3% to 16.745 billion yuan in 2024, up from 12.659 billion yuan in 2023 [6]. - The success of the "Dongfang Shuye" brand significantly contributed to this growth, with its sales reportedly growing over 100% in 2023 [6][10]. Market Dynamics - The tea beverage market is becoming increasingly competitive, with a surge in new entrants and products, particularly in the sugar-free tea segment, which saw a growth rate of 110% in 2023 [10][15]. - The overall beverage market growth rate was 6%, while the ready-to-drink tea segment grew by 19% [10]. Strategic Focus - Nongfu Spring is actively exploring international market opportunities, aiming for global expansion as indicated by Chairman Zhong Shanshan [6]. - The company emphasizes a "water source factory" model to reduce logistics costs and improve supply efficiency, which is crucial in the bottled water industry [21][22]. Resource Management - Nongfu Spring has established 12 major water sources across China, with a focus on high-quality water resources as a competitive advantage [20][23]. - The company has invested 1.25 billion yuan in the Anhui Huangshan water source project, expected to produce 1.6 million tons of natural drinking water annually [20].