Nongfu Spring Co., LTD.(9633.HK) World-class packaged drinking water enterprise; dual-engine development enables diversified product varieties December 14, 2021 474

PSR Recommendation: BUY Status: Initiation
Target Price: HKD64.59

Investment highlights
Nongfu Spring has been pursuing the “dual-engine” development of drinking water and beverages. On
one hand, it meets the daily drinking needs of consumers and on the other hand, it satisfies the diverse
and personalized drinking demands of consumers. Diversified product varieties enhancing flexible
product mixes has enabled companies and distributors to achieve differentiating advantages in different
markets and channels, to improve scale of business, distribution efficiency and profitability.
The world’s second largest packaged drinking water company
Nongfu Spring’s packaged drinking water products include natural drinking water and natural mineral
water. The company is the second largest packaged drinking water company in the world in terms of
sales volume. It is also the only company, among the top 5 PRC packaged drinking water companies,
that uses solely natural water to produce packaged drinking water, pledging “Every drop of Nongfu
Spring has its source”. In 2020, the company’s market share of packaged drinking water in China reached
20.9% (in terms of retail sales value), which is 1.5 times that of the second largest player. In 2018, 2019
and 2020, the revenue generated from packaged drinking water products accounted for 57.5%, 59.7%
and 61% of the company’s total revenue, respectively.

About the author

Profile photo of Chloe Chan

Chloe Chan
Analyst
Research

陳翹昕小姐 (Chloe Chan) 分析師 陳翹昕小姐持有英國雷丁大學金融與投資銀行一級榮譽學士學位,現為輝立証券持牌分析師,主要負責新股及消費行業研究。 Chloe Chan holds a First-Class Honours degree in Finance and Investment Banking from the University of Reading. She is currently a licensed research analyst at Phillip Securities specializing in IPO and the consumer industry.

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