Citigroup: Raises Nongfu Spring target price to HK$58.5, listed as one of the top choices in the Chinese food and beverage sector.

Citigroup released a report stating that they expect Nongfu Spring's sales in 2025 to increase by 22%, which is 7 percentage points higher than management's guidance and 4 percentage points higher than the market's expectations. This growth is mainly attributed to stronger than expected sales recovery in the packaged water business, as well as better than expected sales performance of ready-to-drink tea beverages in the second half of the year. Additionally, the bank forecasts a 25% annual growth in net profit for 2025, which is 3 percentage points higher than market expectations. They have revised their 2025 and 2026 net profit forecasts for Nongfu Spring by 4% and 3% respectively, raised the target price from 53.3 Hong Kong dollars to 58.5 Hong Kong dollars, and initiated a 30-day positive catalyst observation period. They maintain a "buy" rating and consider both Dongpeng Beverage and Nongfu Spring as top picks in the Chinese food and beverage sector.