Citigroup: Raises Nongfu Spring's target price to 52 Hong Kong dollars, remains the top pick in the beverage industry.

Citigroup released a research report stating that Nongfu Spring has outperformed expectations, with high visibility of growth in the second half of the year. Sales and net profit in the first half of the year increased by 16% and 22% respectively year-on-year, reaching the upper limit of market expectations. Core operating profit increased by 31% year-on-year, surpassing expectations, mainly due to the faster-than-expected recovery of gross profit margin and effective control of sales and administrative expenses. The bank expects strong growth in the group's packaged water sales to continue in the second half of the year, with improved product mix reducing price fluctuations and healthy channel inventory levels. It is expected that Nongfu Spring will consolidate its leading position in the sugar-free tea market and explore additional growth opportunities through promotions and introduction of new flavors. Bank of America Securities has raised its earnings forecast for Nongfu Spring for the next two years by 2% per share, raising its target price from 50 Hong Kong dollars to 52 Hong Kong dollars, and continues to list it as the preferred stock in the beverage industry with a "buy" rating.