Citi raises NONGFU SPRING's target price to 58.5 yuan and initiates a 30-day positive catalyst observation

Citi released a report stating that it expects NONGFU SPRING (09633.HK) to achieve a 22% increase in full-year sales for 2025, which is 7 percentage points higher than the management's guidance of "mid-single digits" and 4 percentage points above market expectations. This is mainly attributed to a stronger-than-expected recovery in the sales of packaged water and better-than-expected sales performance of ready-to-drink tea beverages in the second half of the year. At the same time, it expects a 25% year-on-year growth in net profit for the full year of 2025, which is 3 percentage points higher than market expectations.

The bank raised its net profit forecasts for NONGFU SPRING for 2025 and 2026 by 4% and 3%, respectively, and increased the target price from 53.3 yuan to 58.5 yuan. It has initiated a 30-day observation period for positive catalysts and maintained a "Buy" rating, ranking Dongpeng Beverage (605499.SH) and NONGFU SPRING as top picks in the Chinese food and beverage sector