Nongfu Spring Welcomes "Daybreak": 2025 Revenue Breaks 500 Billion Yuan Mark for the First Time, Drinking Water Business Returns to Growth

How AI and Nongfu Spring Achieved Business Recovery from Public Opinion Storms

By Reporter Ye Xiaodan | Edited by Wei Wenyu

Nongfu Spring (HK09633, stock price 47.04 HKD, market value 529.034 billion HKD) has achieved record-high revenue again.

On the evening of March 24, Nongfu Spring announced its 2025 annual report, showing the company achieved total revenue of 52.553 billion RMB, a 22.5% increase over 2024, surpassing the 50 billion RMB mark for the first time; net profit attributable to shareholders was 15.868 billion RMB, up 30.9%.

Image source: Nongfu Spring 2025 Annual Report

The Daily Economic News (hereafter “D.E.N.”) noticed a subtle but crucial turning point behind the annual report: in 2025, Nongfu Spring’s bottled water business recovered growth, with revenue of 18.709 billion RMB, up 17.3% from 2024. In 2024, Nongfu Spring’s water business was affected by online public opinion, leading to a temporary decline in earnings. In contrast, the 2025 performance data serves as another market validation of Nongfu Spring’s brand.

Nongfu Spring Chairman Zhong Shanshan stated in the 2025 annual report: “Congratulations to our new management team, who have withstood the test of public opinion and are becoming increasingly mature.”

In 2025, the beverage industry faced multiple challenges such as price wars and channel battles, with fierce competition. Nongfu Spring indicated that its annual performance was not the result of brutal price wars or short-term channel stockpiling, but benefited from its “Water + Beverage” dual-engine development model.

From the revenue structure, in 2025, packaged drinking water and tea beverages remained Nongfu Spring’s core businesses, accounting for 76.7% of total revenue. Water remains the company’s foundation, continuously deepening its moat through water source development. Meanwhile, under the trend of health-oriented tea drinks, Nongfu Spring’s tea beverage products maintained strong growth, becoming a new engine for performance.

On the morning of March 25, Nongfu Spring’s stock price rose. As of press time, shares increased by 10.84%.

Bottled Water Business Stabilizes and Recovers, Continued Investment in Water Source Development

In mid-March this year, Nongfu Spring’s Yunnan Jiaozish Snow Mountain plant officially began operation, a water source facility with a total investment of over 1 billion RMB.

The Yunnan Jiaozish Snow Mountain water source is at an altitude of 2,600 meters. The pipeline from the source to the factory is 41 kilometers long, with a elevation difference of about 1,400 meters, passing through a 10-kilometer cliff.

Such water source factories have always been a key part of Nongfu Spring’s strategic layout. Zhong Shanshan explained in the 2025 annual report that Nongfu Spring has insisted on establishing water source plants since 1996, with water source bottling. In 2025, three new water sources were added, and one more in 2026. Currently, the company has established 16 major water sources nationwide.

Why does Nongfu Spring attach such importance to water source development?

Nongfu Spring stated: “Over the past nearly 30 years, Nongfu Spring has laid out water conveyance systems and production networks across the country, forming a stable connection between water sources and consumer markets. Although the transportation radius of a single plant averages around 500 kilometers or more, the scale layout has continuously improved overall efficiency. This model requires large upfront investment, but once the network is formed, costs and supply become more stable. In an industry with intensifying price competition, this stability becomes a major advantage.”

However, in 2024, Nongfu Spring’s bottled water business experienced an unusual decline in revenue. In the 2024 annual report, Chairman Zhong Shanshan said that in 2024, the company was subjected to organized, prolonged online smear campaigns and attacks, which posed a historic test for Nongfu Spring’s brand image. This intense public opinion assault, paradoxically, proved the quality of Nongfu Spring’s water sources and products. Despite a continuous three-month decline in market share for bottled water, the company’s full-year revenue from bottled water still fell by 21.3%, but it maintained the top position in China’s bottled water market.

In response to the online storm, Zhong Shanshan publicly said: “Let them go, eventually the truth will come out, only a matter of time. As long as I can hold on until dawn.”

The market ultimately provided its answer. In 2025, Nongfu Spring’s bottled water business recovered, with a 17.3% increase over 2024.

Water remains Nongfu Spring’s core focus. The company sees water not just as a scale business but as a source of stability. D.E.N. noted that Zhong Shanshan and Nongfu Spring, emerging from the storm, now emphasize “stability” in their business system and development. Zhong Shanshan stated in the 2025 annual report: “Adopting a ‘more stable, slower, and farther’ approach, accumulating strength over time.”

Industry Competition Intensifies: How to Sustain Growth?

In 2024, leading companies’ “water wars” pushed the price of pure water into the 1 RMB era. In 2025, competition in the beverage industry remains fierce, with ongoing price wars and channel battles. Some beverage companies faced performance pressure due to price competition. Amidst rising prices and squeezed industry profits, growth momentum has noticeably weakened.

However, Nongfu Spring’s 2025 annual report shows its gross profit margin increased compared to 2024.

Data indicates that Nongfu Spring’s gross margin was 58.1% in 2024, rising by 2.4 percentage points to 60.5% in 2025. The company attributed this improvement to lower procurement costs for PET raw materials, as well as reduced costs for packaging cartons, sugar, and other raw materials. Additionally, controlling the proportion of e-commerce sales helped stabilize distributor pricing and maintain healthy profit margins.

Regarding the strategy of controlling e-commerce sales share to stabilize distributor pricing and improve margins, Nongfu Spring told D.E.N. that e-commerce sales previously accounted for about 5%. The company plans to keep more sales through channels with more stable prices, ensuring offline distributor profits while also supporting overall profit growth.

Furthermore, Nongfu Spring’s tea beverage revenue grew strongly, becoming a new growth engine alongside bottled water. The financial report shows that in 2025, tea beverage revenue reached 21.596 billion RMB, up 29.0%, accounting for 41.1% of total revenue, making it Nongfu Spring’s largest product category.

Nongfu Spring’s Oriental Leaf launched in 2011, initially not a mainstream demand. But as reducing sugar intake became a consensus, sugar-free drinks entered daily consumption scenarios, with sugar-free tea becoming one of the most accepted categories due to its closer resemblance to natural products.

According to the “2024–2025 China Tea Beverage Industry Development and Consumer Insights Report” by iiMedia Research, the market size of sugar-free beverages in China grew from 2.26 billion RMB in 2015 to 40.16 billion RMB in 2023, with an expected reach of 81.56 billion RMB by 2028. The Chinese sugar-free beverage market is expected to continue its steady growth.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Operate at your own risk.

Daily Economic News