Bank of Communications International released a research report indicating that due to the decrease in market share of Nongfu Spring (09633.HK) packaged water, the mid-term performance fell short of expectations. The revenue in the first half of the year was lower than the company's guidance. Considering that it takes time for the market share to recover, it is currently expected that the business revenue of packaged drinking water this year will only achieve a low single-digit percentage increase.

In the first half of the year, the revenue of the tea beverage business increased by 59% year-on-year, accounting for 38% of the overall revenue, approaching the packaged water business. The operating profit margin is 10 percentage points higher than the packaged water business, becoming the largest source of profit contribution during the period. Based on the unfavorable market environment in the second half of the year and the management's conservative outlook, Bank of Communications International believes that it is challenging for Nongfu Spring to achieve double-digit growth in annual revenue. Accordingly, the target price has been lowered from 57.8 yuan to 50.38 yuan, and the "buy" rating is maintained.