Goldman Sachs: Raises Nongfu Spring's target price to HK$48, reiterates "buy" rating.

Goldman Sachs released a research report predicting that Nongfu Spring's sales in the first half of this year will reach 25.4 billion yuan, with a net income of 7.3 billion yuan, an increase of 15% and 17% respectively year-on-year, roughly in line with the bank's previous expectations. Looking ahead to the second half of the year, the bank believes that due to the low base effect, along with the group's product innovation capabilities and flexible channel and marketing strategies, performance is expected to continue to improve. The bank mentioned that it is paying attention to the recent public opinion pressure faced by major competitor Wahaha and the potential consumer migration opportunities that may arise from potential intervention by the Hangzhou local government. The bank has raised its revenue forecast for Nongfu Spring for the years 2025 to 2027 by 1% to 3%, based on a 2% to 7% increase in forecasted growth for bottled water, and has raised profit forecasts by 3% to 9% for the same period due to strong profit margins; the latest forecasts for full-year sales and net profit in 2025 are expected to increase by 17% and 20% respectively year-on-year, and by 14% and 16% in 2026. The bank has raised its target price from 43.6 Hong Kong dollars to 48 Hong Kong dollars and reiterated its "buy" rating.