Nongfu Spring (9633) H2 2024 earnings summary

Executive summary

• Revenue reached RMB42,896 million in 2024, up 0.5% year-over-year; net profit attributable to owners was RMB12,123 million, up 0.4%.

• Basic EPS was RMB1.078, up 0.4% year-over-year; final dividend of RMB0.76 per share proposed, totaling RMB8,547 million.

• Despite negative publicity and a 21.3% drop in packaged water revenue, the company maintained its leading market share and saw strong growth in tea beverages.

• Gross profit margin declined to 58.1% from 59.5% due to product mix changes and higher raw material costs.

• The company continued to invest in R&D, agricultural collaboration, and digital transformation.

Financial highlights

• Gross profit was RMB24,916 million, down 1.9% year-over-year; gross margin fell by 1.4 percentage points.

• Selling and distribution expenses decreased 1.2% to RMB9,173 million; administrative expenses fell 9.3% to RMB1,962 million.

• Other income and gains rose 15.6% to RMB2,129 million, mainly from increased government grants.

• Finance costs decreased to RMB91 million from RMB100 million.

• Cash, bank balances, and deposits totaled RMB21,361 million, down 16.7% year-over-year.

Outlook and guidance

• Management expects steady growth in China's consumer market and plans to expand agricultural and overseas business.

• Focus remains on premium water sources, R&D, and international expansion.

• The company aims to enhance risk management and crisis response following 2024's public opinion challenges.