Jefferies Keeps Their Hold Rating on Nongfu Spring Co., Ltd. Class H (9633)
Bullish on Nongfu Spring's Tea Segment Growth Despite Market Challenges: Maintaining Buy Rating
Nongfu Spring (9633.HK): Down-to-earth and healthy development
Event: The company releases its 2024 interim performance, achieving a revenue of 22.173 billion yuan, a year-on-year increase of 8.4%, and a net income attributable to the parent company of 6.24 billion yuan, a year-on-year increase of 8.0%. Comments: Influenced by online public opinion, packaged drinking water revenue
Data Revealed | What did Beishui buy in August? Continuously increased holdings of Tencent by nearly 6.2 billion Hong Kong dollars, and sold hsbc holdings for over 1.8 billion Hong Kong dollars.
In August, the cumulative turnover of southbound funds was HKD 622.476 billion, a significant decrease of HKD 118 billion compared to July. In addition, the net inflow of southbound funds in this month was HKD 41.876 billion, a decrease of about HKD 6 billion compared to July, and lower than the average for the first 8 months.
Nongfu Spring (09633.HK): Sugar-free tea hedges against water consumption decline, while beverage competitiveness continues to strengthen.
The company announced its 1H24 performance, which met our expectations. The revenue reached 22.17 billion yuan, a year-on-year increase of +8.4%; the net income attributable to shareholders reached 6.24 billion yuan, a year-on-year increase of +8.0%. The performance met our expectations. The development trend is sugar-free.
"DaXing" BoC International lowers nongfu spring (09633.HK) target price to 50.38 yuan, mid-term performance lags behind expectations.
China CITIC Bank International issued a research report stating that due to the decline in market share of Nongfu Spring (09633.HK) packaged water, the midterm performance fell below expectations. In the first half of the year, the revenue fell short of the company's guidance. Considering that the recovery of market share will take time, it is currently expected that the revenue of the packaged drinking water business this year will only achieve a low single-digit percentage growth. In the first half of the year, the revenue of the tea beverage business increased by 59% year-on-year, accounting for 38% of the overall revenue, approaching the packaged water business. The operating profit margin is 10 percentage points higher than the packaged water business, making it the largest source of profit contribution in the period. Based on the unfavorable market environment in the second half of the year and the management's conservative outlook, China CITIC Bank