Analyst

Steve Zhou, CFA

15 years of experience in both buy and sell-side in Asia.

Nongfu Spring (9633 HK):  Strong Results Overshadowed By Short Term Negative Publicitiy

Nongfu Spring (9633 HK):  Within Striking Distance

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/nongfu-spring-co-ltd" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a>'s valuation has come down to a much more reasonable 20x forward PE with expected net profit CAGR of 15% for the next 3 years.</li>
<li>The derating is largely due to the negative media portrayal of the company's Nongfu brand since February 2024, resulting in a -18% decline in its water business in 1H24. </li>
<li>Unsweetend tea business on the other hand has continued to shine, growing 59% yoy in sales in 1H24, while operating profit of the segment surged 63% yoy. </li>
</ul>



Nongfu Spring (9633 HK)'s valuation has come down to a much more reasonable 20x forward PE with expected net profit CAGR of 15% for the next 3 years.
The derating is largely due to the negative media portrayal of the company's Nongfu brand since February 2024, resulting in a -18% decline in its water business in 1H24. 
Unsweetend tea business on the other hand has continued to shine, growing 59% yoy in sales in 1H24, while operating profit of the segment surged 63% yoy. 


Nongfu Spring (9633 HK):  Trading At Below 20x Forward PE With 15% NP 3-Year CAGR