‘Winning Continuously’ Nongfu Spring (09633) has long focused on packaged water as its core business. Under the trend of health-conscious consumption, the company has achieved a significant transformation in its business structure, steadily climbing in performance driven by explosive growth in the tea beverage segment. Meanwhile, its brand strength has gained international recognition, successfully ranking among the top three global soft drink brands by brand value, with its brand value surpassing ten billion US dollars, standing alongside Yili as a representative of China's top consumer brands.
According to the latest financial results for the first half of 2026, Nongfu Spring achieved total revenue of RMB 29.718 billion (RMB, hereinafter the same), an increase of 16.0% year-on-year, with net profit attributable to shareholders reaching RMB 8.887 billion, up 16.6% year-on-year. Overall profitability has steadily improved, with gross margin maintaining a high level of 60.9%. The biggest highlight came from the tea beverage segment, where revenue reached RMB 13.122 billion in the first half of the year, a substantial year-on-year increase of 30.1%, accounting for 44.2% of total revenue. This officially surpassed the traditional packaged water business, becoming the company's largest revenue source, marking Nongfu Spring's definitive entry into a new development phase of ‘tea beverages as the core, packaged water as the foundation.’
The core flagship product driving high growth in tea beverages is Oriental Leaf, the undisputed leader in the sugar-free tea category. As public awareness of healthy eating spreads, sugar-free, natural, and additive-free tea beverages have become mainstream in the market. Oriental Leaf accurately captured this emerging trend and has long maintained over 70% market share in China's sugar-free tea market, demonstrating extremely significant monopolistic advantages. The product covers various flavors including black tea, green tea, oolong tea, jasmine tea, and seasonal limited Longjing tea, comprehensively matching daily consumption scenarios such as commuting, office work, leisure, and dining gatherings. It has successfully broken the monopoly of traditional sugary tea beverages and become the company’s most stable growth driver.
While consolidating its leading position in the sugar-free tea segment, Nongfu Spring continues to expand its tea beverage product categories, opening up incremental opportunities. The company actively targets niche markets, launching iced tea products to enter the carbonated tea segment and capture the young consumer market. The launch of the new ginger tea warm beverage further strategically expands into the functional and seasonal market during autumn and winter, filling the gap in off-season demand, breaking through the seasonal sales barriers of tea beverages, and achieving full-year, all-time market coverage.
From an industry perspective, the domestic beverage market continues to evolve, with sustained decline in demand for low-end sugary drinks, while health-oriented and functional beverages become long-term trends. Nongfu Spring has accurately captured this industry shift, leveraging its highly competitive tea beverage portfolio, combined with a mature nationwide distribution network and a robust supply chain system, to achieve continuous performance breakthroughs.
Looking ahead, Oriental Leaf will continue to consolidate its monopolistic advantage in the sugar-free tea industry, serving as a stable cash flow source; meanwhile, new products such as carbonated tea and functional warm beverages will continue contributing incremental performance. As brand value and market recognition rise together, Nongfu Spring has completed its business upgrade and transformation, holding enormous long-term growth potential.
On the stock price front, although it remains in a long-term downtrend over the past year, it has recently started to rebound after hitting a one-year low of HK$37.9 (HK$, hereinafter the same). If the stock can rise above and hold above the 100-day moving average at HK$42 in the future, it may break out of the downward channel and further test HK$45. Investors may pay closer attention. <Lian Jinghan, Council Member, Hong Kong Stock Analysts Association>
*The author does not hold the aforementioned shares
*Articles published in <Economic Times>, signed or unsigned, represent the personal opinions of the authors and do not reflect the position of <Economic Times>. <Economic Times> serves as a platform providing free expression of opinions.
According to the latest financial results for the first half of 2026, Nongfu Spring achieved total revenue of RMB 29.718 billion (RMB, hereinafter the same), an increase of 16.0% year-on-year, with net profit attributable to shareholders reaching RMB 8.887 billion, up 16.6% year-on-year. Overall profitability has steadily improved, with gross margin maintaining a high level of 60.9%. The biggest highlight came from the tea beverage segment, where revenue reached RMB 13.122 billion in the first half of the year, a substantial year-on-year increase of 30.1%, accounting for 44.2% of total revenue. This officially surpassed the traditional packaged water business, becoming the company's largest revenue source, marking Nongfu Spring's definitive entry into a new development phase of ‘tea beverages as the core, packaged water as the foundation.’
The core flagship product driving high growth in tea beverages is Oriental Leaf, the undisputed leader in the sugar-free tea category. As public awareness of healthy eating spreads, sugar-free, natural, and additive-free tea beverages have become mainstream in the market. Oriental Leaf accurately captured this emerging trend and has long maintained over 70% market share in China's sugar-free tea market, demonstrating extremely significant monopolistic advantages. The product covers various flavors including black tea, green tea, oolong tea, jasmine tea, and seasonal limited Longjing tea, comprehensively matching daily consumption scenarios such as commuting, office work, leisure, and dining gatherings. It has successfully broken the monopoly of traditional sugary tea beverages and become the company’s most stable growth driver.
While consolidating its leading position in the sugar-free tea segment, Nongfu Spring continues to expand its tea beverage product categories, opening up incremental opportunities. The company actively targets niche markets, launching iced tea products to enter the carbonated tea segment and capture the young consumer market. The launch of the new ginger tea warm beverage further strategically expands into the functional and seasonal market during autumn and winter, filling the gap in off-season demand, breaking through the seasonal sales barriers of tea beverages, and achieving full-year, all-time market coverage.
From an industry perspective, the domestic beverage market continues to evolve, with sustained decline in demand for low-end sugary drinks, while health-oriented and functional beverages become long-term trends. Nongfu Spring has accurately captured this industry shift, leveraging its highly competitive tea beverage portfolio, combined with a mature nationwide distribution network and a robust supply chain system, to achieve continuous performance breakthroughs.
Looking ahead, Oriental Leaf will continue to consolidate its monopolistic advantage in the sugar-free tea industry, serving as a stable cash flow source; meanwhile, new products such as carbonated tea and functional warm beverages will continue contributing incremental performance. As brand value and market recognition rise together, Nongfu Spring has completed its business upgrade and transformation, holding enormous long-term growth potential.
On the stock price front, although it remains in a long-term downtrend over the past year, it has recently started to rebound after hitting a one-year low of HK$37.9 (HK$, hereinafter the same). If the stock can rise above and hold above the 100-day moving average at HK$42 in the future, it may break out of the downward channel and further test HK$45. Investors may pay closer attention. <Lian Jinghan, Council Member, Hong Kong Stock Analysts Association>
*The author does not hold the aforementioned shares
*Articles published in <Economic Times>, signed or unsigned, represent the personal opinions of the authors and do not reflect the position of <Economic Times>. <Economic Times> serves as a platform providing free expression of opinions.
