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<p>Nongfu Spring announced its full-year 2025 results on Tuesday: full-year revenue reached 52.553 billion yuan, a significant year-on-year increase of 22.5%; net profit attributable to parent company was 15.868 billion yuan, a year-on-year increase of 30.9%, with growth significantly outpacing revenue. <strong>The company's annual revenue exceeded the 50 billion yuan threshold for the first time, and profitability was &#34;amplified&#34; by the combined effect of cost reduction and improved expense efficiency.</strong></p>
<p>Profit margins continued to strengthen. In 2025, the company's gross profit margin rose to 60.5%, an increase of 2.4 percentage points from the previous year; the sales and distribution expense ratio decreased to 18.6%, a year-on-year decrease of 2.8 percentage points, demonstrating significant operating leverage. Calculated on a consolidated income statement basis, operating profit was approximately 20.985 billion yuan, with an corresponding operating profit margin close to 40%.</p>
<p>By category, <strong>tea beverages continue to be the &#34;main growth engine.&#34;</strong> Ready-to-drink tea revenue reached 21.596 billion yuan, a year-on-year increase of 29.0%, with its share of revenue increasing to 41.1%; the bottled water business resumed growth after adjustments, with revenue of 18.709 billion yuan, a year-on-year increase of 17.3%. Juices and functional beverages also maintained double-digit growth, with juices showing a remarkable year-on-year increase of 26.7%.</p>
<p>Shareholder returns also increased simultaneously. <strong>The company plans to distribute a final dividend of 0.99 yuan per share, totaling approximately 11.134 billion yuan, a significant increase from the dividends distributed in the previous year</strong>; meanwhile, the company's cash, fixed deposits, etc., totaled approximately 22.293 billion yuan, with a capital-liability ratio of 11.4% remaining basically stable. However, during the reporting period, currency translation losses of approximately 199 million yuan were incurred due to holding foreign currency assets, and interest income also declined significantly against the backdrop of interest rate cuts.</p>
<h2>Performance Overview: After Exceeding 50 Billion Yuan in Revenue, Profit Growth is Faster Due to &#34;Resonance from Both Ends&#34;</h2>
<p>Deconstructing the income statement, the company's &#34;volume increase + gross margin increase + expense ratio decrease&#34; in 2025 created synergy:</p>
<ul>
<li>Revenue: 52.553 billion yuan (+22.5%);</li>
<li>Gross Profit: 31.808 billion yuan (+27.7%), gross margin 60.5% (+2.4pp);</li>
<li>Profit Before Tax: 20.918 billion yuan (+32.5%);</li>
<li>Net Profit Attributable to Parent: 15.868 billion yuan (+30.9%), net profit margin approximately 30.2% (an increase from about 28.3% in the previous year).</li>
</ul>
<p>The company's chairman's remarks also disclosed that if one-time and non-operating gains and losses were excluded, the 2025 profit was 15.999 billion yuan, indicating that the core operating trend is basically consistent with the reported growth rate.</p>
<h2>Product Structure: Tea Beverages Solidify as the Largest Single Product Category, Bottled Water Resumes Growth</h2>
<p>The revenue and proportion of each product category in 2025 are as follows (percentage in parentheses is year-on-year growth):</p>
<ul>
<li>Ready-to-drink Tea: 21.596 billion yuan (+29.0%), proportion 41.1% (39.0% in the previous year);</li>
<li>Bottled Drinking Water: 18.709 billion yuan (+17.3%), proportion 35.6% (37.2% in the previous year);</li>
<li>Functional Beverages: 5.762 billion yuan (+16.8%), proportion 11.0%;</li>
<li>Juice Beverages: 5.176 billion yuan (+26.7%), proportion 9.8%;</li>
<li>Others: 1.309 billion yuan (+10.7%), proportion 2.5%.</li>
</ul>
<p>The most noteworthy aspect of the structure is that the revenue scale of tea beverages continues to widen the gap with bottled water, becoming the company's largest revenue source; the &#34;restorative growth&#34; of bottled water is particularly crucial for stabilizing the overall base. Management attributes the recovery of the water business to initiatives such as spring source development, factory open-day sourcing activities, and the expansion of the product matrix (including premium ice products).</p>
<h2>Segment Profitability: Tea Beverages Contribute the Largest Profit Pool, Juices Show Prominent Profit Elasticity</h2>
<p>The &#34;segment performance&#34; disclosed by the company is on a basis of adjusted profit before tax (excluding interest income, financial expenses, and headquarters expenses, etc.). The total segment performance in 2025 was 22.318 billion yuan, of which:</p>
<ul>
<li>Ready-to-drink Tea segment performance was 10.374 billion yuan, corresponding segment profit margin of approximately 48% (about 45% in the previous year);</li>
<li>Bottled Water was 7.001 billion yuan, corresponding to about 37% (about 31% in the previous year);</li>
<li>Functional Beverages were 2.696 billion yuan, corresponding to about 47%;</li>
<li>Juices were 1.777 billion yuan, corresponding to about 34%, a significant increase from the previous year (about 25% in the previous year).</li>
</ul>
<p>From a change perspective, tea beverages remain the core cash cow with both high scale and high profit; juices exhibit more prominent profit elasticity with high revenue growth, reflecting the increasing pull of product lines such as premium NFC and &#34;17.5°&#34; on profitability.</p>
<h2>Key to Gross Margin Increase: Falling Raw Material Costs Coupled with Channel Order Adjustment</h2>
<p>The company attributes the increase in gross margin primarily to the decrease in procurement costs of raw materials such as PET packaging, cartons, and white sugar. In addition to favorable cost conditions, management also emphasized &#34;controlling the proportion of e-commerce channel sales&#34; to stabilize the pricing order and channel profitability of the distribution system—this implies that the company still prioritizes a &#34;sustainable pricing system&#34; over simply pursuing online volume growth during its growth phase.</p>
<p>Correspondingly, depreciation and amortization totaled 2.759 billion yuan (2.445 billion yuan in the previous year), indicating that the company is still investing in production capacity and supply chain. However, price system management during the cost reduction phase prevented new depreciation from suppressing overall profit margins.</p>
<h2>Expense Side: Sales Expense Ratio Significantly Decreased, Administrative Expenses and Equity Incentives Increased</h2>
<p>In 2025, sales and distribution expenses were 9.800 billion yuan, a year-on-year increase of only 6.8%, significantly lower than the revenue growth rate, with the expense ratio falling to 18.6%. The company explained the main reasons as:</p>
<ul>
<li>A year-on-year decrease in advertising and promotion expenses after the &#34;Olympic year&#34; of 2024;</li>
<li>A decrease in logistics cost rates due to changes in product mix and sales volume.</li>
</ul>
<p>Administrative expenses were 2.452 billion yuan, a year-on-year increase of 25.0%, with the expense ratio remaining basically flat at 4.7%, but the absolute amount grew faster. It is worth noting that share-based payment expenses rose to 0.077 billion yuan (0.006 billion yuan in the previous year), corresponding to a new round of employee equity incentive grants; employee benefits expenses totaled approximately 5.100 billion yuan, reflecting continued organizational expansion and incentive investment.</p>
<h2>Other Gains and Losses: Interest Income Declined, Currency Translation &#34;Turned from Profit to Loss&#34;</h2>
<p>&#34;Other income and gains&#34; were 1.720 billion yuan, a year-on-year decrease of 19.2%, with the core drag coming from interest income: interest income in 2025 was 0.580 billion yuan, a significant decrease from 0.866 billion yuan in the previous year, reflecting the decline in fund yield in an environment of falling interest rates.</p>
<p>&#34;Other expenses&#34; increased from 0.030 billion yuan to 0.291 billion yuan, mainly composed of two items:</p>
<ul>
<li>Currency translation losses of approximately 0.199 billion yuan (0.075 billion yuan in exchange gains in the previous year);</li>
<li>Donation expenses of 0.068 billion yuan.</li>
</ul>
<p>The company disclosed that as of the end of the period, it held foreign currency assets such as 1.647 billion Hong Kong dollars and 606 million US dollars. The foreign currency exposure had a more direct impact on the income statement due to exchange rate fluctuations.</p>
<h2>Balance Sheet: Ample Funds but More Aggressive Financial Asset Allocation, Inventory Turnover Slowed</h2>
<p>As of the end of 2025, the company's total long-term fixed deposits, restricted funds, pledged deposits, cash, and bank balances amounted to approximately 22.293 billion yuan, a slight year-on-year increase; interest-bearing debt in the same period was 4.390 billion yuan, and the capital-liability ratio of 11.4% remained basically unchanged from the previous year, overall maintaining a &#34;high cash, low leverage&#34; structure.</p>
<p>More noteworthy is the change in financial asset allocation: financial assets measured at fair value through profit or loss reached 7.555 billion yuan at the end of the period, a substantial increase from 1.529 billion yuan in the previous year, indicating that the company has increased its allocation of trading financial assets to improve fund utilization efficiency in a low-interest-rate cycle.</p>
<p>In terms of working capital, inventory increased year-on-year to 5.846 billion yuan. Management explained this as related to production stocking and the construction of the entire tea raw material industry chain. Inventory turnover days increased from 82.3 days to 95.5 days; accounts receivable remain low (0.598 billion yuan at the end of the period), with turnover days decreasing to 4.1 days, reflecting strong channel collection capabilities. Contract liabilities (prepayments) at the end of the period increased to 4.195 billion yuan, also indicating channel prepayments and sales rhythm from another perspective.</p>
<h2>Dividends and Investments: Proposed Dividend of 11.1 Billion Yuan, While Adjusting IPO Fundraising Use to Increase Production Capacity</h2>
<p>The company proposes a final dividend of 0.99 yuan per share, totaling approximately 11.134 billion yuan; calculated based on the full-year net profit attributable to parent of 15.868 billion yuan, the cash return is at a high level.</p>
<p>On the investment side, the company's property, plant, and equipment at the end of the period were 24.719 billion yuan, a year-on-year increase, with capital commitments of approximately 4.906 billion yuan, still in the stage of capacity expansion and supply chain strengthening. Meanwhile, the company announced that it will adjust a portion of its unutilized IPO funds (0.726 billion Hong Kong dollars) from &#34;basic capacity construction&#34; to &#34;purchase of production facilities and new factory construction,&#34; and extend the use period of the remaining funds to the end of 2027—against the backdrop of exchange rate fluctuations and imported equipment procurement, this adjustment emphasizes reducing exchange rate losses, improving fund efficiency, and reserving space for investments in spring sources and the tea industry chain.</p>

FTXG

515170

09633

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159843

<p>The company's annual revenue exceeded the 50 billion yuan mark for the first time, with tea beverages continuing to be the "main growth engine." Ready-to-drink tea revenue reached 21.596 billion yuan, a year-on-year increase of 29.0%. Bottled water business resumed growth after adjustments, with revenue of 18.709 billion yuan, a year-on-year increase of 17.3%</p>

- Nongfu Spring reported a 2025 revenue of 52.55 billion yuan, a 22.5% increase year-on-year, with a net profit of 15.87 billion yuan, up 30.9%.  
- The tea beverage segment emerged as the primary growth driver, achieving revenue of 21.60 billion yuan, up 29.0%, while packaged water also recovered with a 17.3% increase to 18.71 billion yuan.  
- The company plans to distribute a dividend of 0.99 yuan per share, totaling approximately 11.13 billion yuan, while maintaining a stable capital structure with a debt ratio of 11.4%.

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First Trust NASDAQ Food & Beverage

ChinaAMC CSI Food & Beverage Sub-Industry ETF

NONGFU SPRING

Tianhong CSI Food and Beverage ETF

China Merchants Guozheng Food and Beverage ETF

Nongfu Spring's 2025 Revenue Grows 22.5% Year-on-Year to a New High, Net Profit Increases 30.9%, Proposes Cash Dividend of 11.134 Billion Yuan | Earnings Insights