On July 24th, Nomura released a research report stating that Nongfu Spring's packaged drinking water revenue in the first half of the year fell 10% year-on-year, while the growth trend of its flavored beverage business remained unchanged. The management admitted that the impact from the Wahaha incident was greater than expected, but the impact had begun to fade over the past two months. They also mentioned that sales have gradually returned to normal since June. The company plans to strengthen channel investment and market promotion in the second half of the year to re-capture market share. Considering the operation de-leveraging and marketing investment, the bank predicts a 13% year-on-year decline in profits in the second half of this year. They advise investors to wait until the packaged drinking water business stabilizes before investing. The bank has downgraded the company's rating from “outperform the market” to “hold” and cut the target price from HKD 48 to HKD 36. The bank has also reduced the company’s earnings per share forecast for 2024 to 2026 by 13% to 15%, mainly due to the downgrade of the revenue and gross profit forecast for packaged drinking water. Nomura pointed out that the growth of Nongfu Spring's tea drink business remained stable, with a year-on-year growth of over 50% in the first half of this year. It is predicted to grow by about 20% in the second half of the year, and the revenue of tea drinks will account for 38% of the total revenue in the second half of the year.