CMB International: Raises Nongfu Spring's target price to HK$60.88, maintains "buy" rating.

Guosen Securities International released a report stating that Nongfu Spring's revenue for the fiscal year 2025 is expected to increase by 22.5% year on year to 52.6 billion yuan, which is 4% higher than market expectations. Net profit is expected to increase by 30.9% year on year to 15.9 billion yuan, which is 6% higher than market expectations. The performance is boosted by the recovery of the bottled water business, better than expected performance in tea and juice business, and significant reduction in sales and administrative expenses after the Olympic year. Nongfu Spring maintains its double-digit revenue growth target for the fiscal year 2026, but did not provide guidance on gross profit margin or net profit, mainly due to the current environment of uncertainty. The bank forecasts a compound annual growth rate of around 11% for revenue and profit from 2026 to 2028. The bank maintains its "buy" rating on Nongfu Spring and has raised the target price by 5% to 60.88 Hong Kong dollars.