After the close of trading on July 9th, Nongfu Spring(09633) announced that its controlling shareholder, Yang Sheng Tang, plans to increase its holdings of the company's H-shares in the public market with its own funds within about six months, with a total amount of no more than 2 billion Hong Kong dollars. Nongfu Spring stated that Yang Sheng Tang's plan to increase its holdings reflects the controlling shareholder's long-term commitment and firm confidence in the company's prospects.

When stock prices fall, enterprises usually increase their holdings with real money and silver, which can not only stabilize stock prices, but also give long-term holders confidence. However, in the current weak overall stock market, such things are becoming less and less common.

This shows why, after more than 100 days of online violence, Nongfu Spring remained unmoved, which is due to its inherent self-confidence. Looking back at product management, dealer services, public welfare and other aspects, Nongfu Spring has demonstrated a calm attitude and a responsible behavior towards every stakeholder, which may be the reason for its solid foundation.

What is a good company? Let's not talk about sentiments. The most basic and even the only important criterion for judging a good company is that it can provide good products.

Many companies have a tendency to focus on 'value', and CEOs often use grandiose words when speaking at press conferences. However, for a company, good products are the most basic and perhaps the only criterion for judging its performance.

Nongfu Spring was violently attacked online for more than three months, but the discussions were always about various baseless moral judgments, even ridiculous ones. Even with a magnifying glass, some people failed to find any quality issues with Nongfu Spring's products.

Solid product quality management is a valid reason for Nongfu Spring's promotion. However, what we have seen in the past is that Nongfu Spring only proactively stated their abilities when they were forced to do so.

This is even true for Nongfu Spring's water sources. Many people have discovered that it takes several years to determine each water source of Nongfu Spring, and that they have gone through up to 171 rounds of water quality tracking and monitoring during the process. This is all for a bottle of 2 yuan water.

In fact, even Nongfu Spring's methods of water extraction can become technical patents and barriers, not to mention its outstanding product research and development capabilities. For more than 20 years, Nongfu Spring's quality has been continuously stable, and consumers have always voted for it. During this year's 618 promotion, Nongfu Spring maintained its industry-wide and nationwide #1 spot.

If an enterprise were a person, its products would represent its character. A businessperson and their company are judged by the quality of their products, which express their contribution to society. From a business theory standpoint, if all of an enterprise's products are of top quality, then that enterprise must be noble. As an enterprise, if its products are not good and it only talks about sentiment, this is no different from being a thug.

Not to mention that while Nongfu Spring was being violently attacked online, floods occurred throughout the country in June. Nongfu Spring's regional employees continued to adhere to public welfare, delivering much-needed drinking water to flood victims in the first time. This is not something that can be explained by sentiment, but more of a habit and a reflex-like sense of responsibility for the enterprise.

'Responsibility' is essentially a kind of gene, which can be extended to various aspects of an enterprise.

When we say that a person is 'responsible,' it is often not just an evaluation of his or her responsibility for a certain matter. 'Responsible' is actually a kind of gene that can be extended to various aspects. Enterprises are the same. In the process of entrepreneurship at Nongfu Spring, we have also seen the win-win relationships that this enterprise has established with upstream and downstream partners.

According to one set of data, for a bottle of 550 ml Nongfu Spring natural water with a retail price of 2 yuan, the factory price is about 0.7 yuan. Deducting logistics costs and taxes, Nongfu Spring's own profit is only 0.55 yuan, which is less than 30%. In contrast, distributors and terminal stores earn about 1.3 yuan per bottle, accounting for more than 64% of the profit. This kind of profit-sharing ratio is rarely seen in other industries and enterprises. During the three years of the pandemic, Nongfu Spring also adhered to its contracts. Even when distributors and terminal stores were closed for a long time and not operational, Nongfu Spring still provided them with display fees, helping them overcome difficulties. In the current era where channels reign, Nongfu Spring has won the most important retail circle 'terminal' in terms of both 'profits' and 'morals.'

Nongfu Spring, which is listed in Hong Kong and has a total market capitalization of nearly 380 billion Hong Kong dollars, has a large number of retail investors who are relatively silent and would hardly be noticed by other companies.

Currently, affected by the volatility of the stock market, the fluctuation of Nongfu Spring's stock price has also been magnified. At this time of price adjustment, Nongfu Spring's major shareholder has chosen to increase their shareholding in the stock in a big way, which clearly releases a strong value signal: on the one hand, this timely increase plan can naturally be regarded as the best proof of Nongfu Spring's responsibility to shareholders, helping to stabilize the stock price; on the other hand, in the current weak market environment, the shareholding also reflects the major shareholder's sufficient confidence in the company's long-term development.

Taking YNSZY HEALTH's big increase plan as a reference, secondary market investors may "refer to" the controlling shareholder's operating trends, actively go long Nongfu Spring, and protect the interests of small and medium-sized shareholders.

After all, from a fundamental point of view, Nongfu Spring, as the leader in the soft drink industry, already has brand advantages, scale advantages, and cost advantages. While holding its core market, the company has also diversified its product portfolio. In the long run, Nongfu Spring has sufficient growth drivers, with performance combining high certainty and growth potential. As the company continues to realize its growth momentum, the stock price may step up and is expected to re-enter a bull trend.

Looking back, in various subtle corners, Nongfu Spring has its own judgments and action standards, almost unaffected by external interference or excessive publicity. It should be said that this is the conscious responsibility and sense of mission of a leading enterprise in the industry, and in this regard, Nongfu Spring can be regarded as a benchmark for Chinese beverage companies.