Goldman Sachs: Nongfu Spring (09633) exceeded expectations in performance last year, rated as "buy"

Goldman Sachs released a research report stating that NONGFU SPRING (09633) is expected to achieve sales revenue of 52.6 billion RMB and net profit of 15.9 billion by 2025, representing a year-on-year growth of 23% and 31% respectively, 3% and 4% higher than the bank's forecast. Among them, the sales of packaged water are expected to increase by 17.3% year-on-year. The bank maintains a "buy" rating with a target price of HKD 60. The report shows that NONGFU SPRING's sales of tea beverages in the second half of last year grew significantly by 38% year-on-year, exceeding expectations by 21%, reflecting the effectiveness of the "open the cap and win prizes" promotion activities and successful winter channel strategy. Juice sales also increased by 33% year-on-year, surpassing expectations. The gross profit margin expanded by 3.4 percentage points during the period, benefiting from the decrease in PET, pulp, and sugar costs, as well as an increase in the proportion of tea beverages.