NONGFU SPRING(9633.HK):1H24 MISSED TEA BECAME TOP PROFIT CONTRIBUTOR
NONGFU SPRING(9633.HK):1H24 MISSED TEA BECAME TOP PROFIT CONTRIBUTOR
Nongfu's 1H24 revenue missed company's guidance given its market share loss in the packaged water segment. We expect low single digit revenue growth for the segment since market share recovery takes time. Tea beverage revenue grew 59% YoY and delivered revenue share close to water of 38%, with a 10ppt higher in OPM than water segment. The tea beverage replaced the packaged water and became the company's top profit driver. We think that it is challenging for the company to meet the double digit growth target for 2024E revenue given unfavourable environment in 2H and softener tone of management. We cut TP by 13% to HK$ 50.38 based on 40x 2024E P/E to reflect lower earnings forecasts. Maintain BUY.
農夫山泉上半年24營業收入未達到公司給出的指導，因爲其在袋裝水領域市場份額下降。我們預計由於市場份額的恢復需要時間，該領域的收入增長將保持低個位數。茶飲料的收入同比增長59%，其收入份額接近於水的38%，其OPM高於水段10個百分點。茶飲料取代袋裝水，成爲公司的最大利潤推動因素。考慮到下半年的不利環境和管理層的軟化態度，我們認爲該公司很難實現2024E年收入的兩位數增長目標。我們根據40倍2024E市盈率將目標價下調13%至50.38港元，以反映較低的盈利預測。保持買入。
Water segment hurt by market share loss. 1H24 revenue grew 8.4% YoY, below the guidance, due to an 18% YoY decline in packaged water revenue, driven by market share loss since Feb caused by brand damage from online rumours. The company observed a recovery in market share during July and Aug, although it takes time to return to pre-Feb levels. We project low single digit growth in full-year revenue for packaged water segment, reflecting a partial offset from the growth in medium to large sized water against the decline in small-sized water segment. OPM of packaged water declined by 4.2 ppt YoY due to promotional activities for green bottle, which dragged the overall OPM down by 1 ppt. We expect continued pressure on margins.
水系列受到市場份額下降的影響。1H24收入同比增長8.4%，低於指導，這是由於袋裝水收入同比下降18%，因爲從2月份以來，由於線上謠言導致品牌受損而造成的市場份額損失。公司在7月和8月觀察到市場份額的恢復，儘管恢復到2月份前的水平需要時間。我們預計袋裝水領域全年收入增長保持低個位數，反映了中大型水對小型水領域的下降的部分抵消。由於對綠色瓶的促銷活動，袋裝水的OPM同比下降了4.2個百分點，這使得整體OPM下降了1個百分點。我們預計利潤空間將繼續承受壓力。
Tea beverage became top profit contributor. Revenue from tea beverage grew 59% YoY in 1H24 on a high base, driven by increased penetration and higher per capita consumption, raising its revenue share to a record 38%, nearing packaged water's contribution. The company expects sustained growth in tea beverages through deeper penetration in lower-tier markets. With tea beverages having an OP margin 10 ppt higher than packaged water, we estimate it will contribute 46% of operating profit, surpassing that of 34% from packaged water and becoming the key profit driver. The company anticipates gradual normalization of tea segment's gross margin.
茶飲料成爲最大利潤貢獻者。1H24茶飲料收入同比增長59%，在高基數的推動下，由於增加滲透率和人均消費量的提高，其收入份額達到紀錄性的38%，接近袋裝水的貢獻。公司預計通過更深入地進入下線城市市場來實現茶飲料的持續增長。考慮到茶飲料的運營利潤率比袋裝水高10個百分點，我們預計其將貢獻46%的營業利潤，超過來自袋裝水的34%，成爲關鍵的利潤推動因素。公司預計茶飲料領域的毛利率將逐漸恢復正常水平。
Gloomy 2H24 outlook, challenging to meet the target. The company notes significant 1H damage, with 2H priorities shifting toward recovery rather than rigid KPIs. Considering the lack of improvement signal in consumer sentiment in 2H24, we expect the company to struggle to achieve double-digit revenue growth for 2024E. We lowered our 2024/25E revenue forecasts by 7-10% and gross margin estimates by 2-3 ppt, leading to an 8- 12% reduction in net profit expectations. We maintain our BUY rating, with TP cut by 13% to HK$50.38 based on 40x 2024E P/E. Risks: food safety issues, intensifying competition, raw material price hike etc.
2H24前景黯淡，達成目標具有挑戰性。公司指出1H損失嚴重，2H的重點轉向恢復而非嚴格的關鍵績效指標。考慮到2H24消費者情緒的缺乏改善信號，我們預計公司將難以實現2024年度兩位數的營業收入增長。我們將2024/25年度營業收入預測下調7-10％，毛利率估計下調2-3個百分點，導致淨利潤預期下降8-12％。我們維持買入評級，目標價根據40倍2024年度市盈率將下調13％至50.38港元。風險：食品安全問題，競爭加劇，原材料價格上漲等。
譯文內容由第三人軟體翻譯。