Citigroup: NONGFU SPRING (09633) Exceeded Expectations in Net Profit Last Year, Preferred Choice in Mainland China Catering Sector.

Citi released a research report saying that NONGFU SPRING (09633) has a stronger growth in revenue and net profit margin compared to its industry peers, which means its profits are less affected by the surge in PET costs. The bank maintains its target price at 58.5 Hong Kong dollars, with a rating of "buy," viewing NONGFU SPRING as the top choice in the Chinese catering sector. NONGFU SPRING's net profit last year increased by 31% year-on-year, exceeding market expectations by 6%, mainly due to revenue growth surpassing expectations. The bank pointed out that the sales growth of NONGFU SPRING's various categories accelerated in the second half of 2025 compared to the first half, which was unexpected. The bank mentioned that due to the positive operating leverage, the year-on-year growth rate of earnings before interest and taxes (EBIT) increased from 29% in the first half to 48% in the second half, and the net profit margin also accelerated from 22% in the first half to 40% in the second half.