Core Insights - The article emphasizes the importance of long-termism in business strategy, advocating for a focus on resilience and pragmatism rather than short-term gains [2][7] - The "Five Purposes" principle guides the company's strategic direction, ensuring alignment with national, social, customer, employee, and shareholder interests [3] Strategic Determination - The "Five Purposes" principle is described as the company's genetic makeup and soul, providing clarity and direction even in challenging times [3] - The company maintains a focus on its core business in building materials, avoiding blind diversification and instead enhancing capabilities through deep engagement with existing technologies and services [3] - A bottom-line thinking approach prioritizes quality and sustainable development, fostering resilience and the ability to navigate market fluctuations [3] Operational Resilience - The "Technology + Service" dual-driven model is identified as key to sustained growth, creating competitive barriers and advantages [4] - Continuous investment in R&D for new materials and processes is seen as essential for establishing industry standards and technical barriers [4] - The company recognizes that customers seek not just products but also long-term safety, leading to the development of a comprehensive service system that enhances customer relationships [4] Organizational Vitality - The concept of "continuous struggle" is embedded in the company's culture, driving ongoing evolution and adaptation [5] - An innovation culture encourages viewing market fluctuations as opportunities for strengthening core capabilities, maintaining agility in response to changes [6] - A value-driven incentive and evaluation system ensures that organizational efforts are aligned with long-term value creation, fostering a cycle of achievement and growth [6] Return to Essence - The company’s three-decade journey underscores the importance of focusing on core competencies, operational resilience, and organizational vitality as foundations for sustainable growth [7] - The commitment to long-termism and internal value cultivation is highlighted as a unique competitive advantage, providing a reference for other companies pursuing high-quality growth [7]

Core Viewpoint - The valuation of Nongfu Spring has experienced fluctuations due to public sentiment, but it has actively responded, leading to a recovery in valuation to above 30x. The company's long-term growth potential and excellent business model are the main reasons for its valuation premium [2]. Group 1: Company Overview - Nongfu Spring, established in 1996, is a rare platform enterprise in the soft drink sector in China, with a comprehensive product layout including packaged water, tea, and juice [4]. - In 2024, the company is projected to generate revenue of 42.9 billion and a net profit of 12.1 billion, with a net profit margin of 28%, leading the industry in both revenue scale and profitability [4]. - The company adheres to a long-termism philosophy, aiming to create products that last a century rather than just achieving short-term revenue goals [4]. Group 2: Market Position and Strategy - The company has a highly concentrated shareholding structure, with founder Zhong Shanshan holding 84% of the shares, allowing for stable and efficient management [6]. - Nongfu Spring has a deep involvement in the upstream supply chain, including tea and fruit cultivation, positioning itself as a vertically integrated enterprise [6]. - The management team has extensive experience in the beverage industry, contributing to effective operational mechanisms and industry-leading incentives [6]. Group 3: Industry Dynamics - The packaged water market in China is expected to reach 247 billion in 2024, with a forecasted medium single-digit growth rate, driven by large and bulk packaging [14]. - The industry has experienced a shift from low-cost "one yuan" water to "two yuan" water, with Nongfu Spring successfully increasing its market share during this transition [18]. - The packaged water sector is characterized by a long lifecycle and continuous growth, benefiting from trends towards health and convenience [11][12]. Group 4: Competitive Landscape - The packaged water industry has seen a concentration of market share among leading brands, with Nongfu Spring significantly widening the gap with competitors [15]. - The competitive landscape has evolved through three phases: product-centric, channel-centric, and brand-centric, with Nongfu Spring emerging as a leader in the brand-centric phase [16][18]. - The company has effectively navigated challenges, including public sentiment issues, by focusing on rational pricing strategies and enhancing brand strength [18].