Hong Kong-listed beverage producer Nongfu Spring released unaudited interim results for the six months ended 30 June 2026, showing double-digit growth across its key financial metrics.
Revenue and Profitability • Revenue rose 16.0% year on year to RMB 29.72 billion. • Profit attributable to shareholders climbed 16.6% to RMB 8.89 billion, lifting basic EPS to RMB 0.790 (1H25: RMB 0.677). • Gross profit increased 17.10% to RMB 18.10 billion; gross margin improved to 60.9% from 60.3%, helped by lower juice and sugar input costs, partly offset by higher PET prices.
Segment Performance • Packaged Drinking Water: RMB 9.64 billion (+2.1% YoY), contributing 32.4% of total revenue. • Tea Beverages: RMB 13.12 billion (+30.1%), 44.2% share; sugar-free “East Leaf” products led growth. • Functional Drinks: RMB 3.35 billion (+15.5%), 11.3% share, supported by new electrolyte beverages. • Juice Beverages: RMB 2.92 billion (+14.0%), 9.8% share. • Other Products: RMB 0.68 billion (+8.7%), 2.3% share, covering soda water, coffee, plant-based drinks and fresh produce.
Cost and Expense Dynamics • Selling & distribution expenses grew 16.6% to RMB 5.84 billion, remaining 19.7% of revenue. • Administrative expenses rose 5.3% to RMB 1.12 billion, reducing to 3.8% of revenue. • Other expenses more than doubled to RMB 0.22 billion, driven mainly by RMB 0.18 billion exchange losses. • Finance costs edged up to RMB 0.03 billion.
Balance Sheet and Cash Flow • Cash, bank balances, restricted cash, pledged deposits and long-term bank deposits totaled RMB 26.53 billion, up 19.0% from end-2025. • Interest-bearing borrowings increased 18.1% to RMB 5.19 billion, pushing the gearing ratio to 14.2% (FY25: 11.4%). • Net current assets improved to RMB 2.22 billion (FY25: RMB 1.74 billion). • Inventory value rose to RMB 6.21 billion; turnover days eased slightly to 94.7 (FY25: 95.5).
Capital Allocation • A final dividend of RMB 0.99 per share for FY25 (total payout: RMB 11.13 billion) was distributed on 19 August 2026. • No interim dividend was declared for 1H26. • Capital commitments stood at RMB 3.97 billion, mainly earmarked for new plants and equipment. • By 30 June 2026, 68.3% of the HK$9.38 billion IPO proceeds had been deployed; the remaining HK$2.97 billion is scheduled for use by end-2027, primarily on brand building and sales equipment.
Operational Highlights • Two additional premium water sources—in Yunnan’s Jiaozi Snow Mountain and Hainan’s Haikou volcanic cluster—lifted the company’s total to 17 nationwide. • Continued product innovation included the launch of cold-extracted Longjing tea and new electrolyte beverages, broadening Nongfu Spring’s health-focused portfolio.
Management reiterated its long-term strategy centered on “natural and healthy” products, expansion of production capacity and water-source assets, and diversified category innovation to sustain growth momentum.