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The latest announcement from Nongfu Spring.

On the evening of August 27, Nongfu Spring announced on the Hong Kong Stock Exchange that its total revenue in the first half of this year was 22.173 billion yuan, an increase of 8.4% year-on-year; the profit attributable to the parent company's owners was approximately 6.24 billion yuan, an increase of 8.0% year-on-year. Basic earnings per share were 0.55 yuan, an increase of 8% year-on-year.

Affected by public opinion, Nongfu Spring's packaged drinking water product revenue declined in the first half of the year

It is worth mentioning that while its performance maintained steady growth, Nongfu Spring’s packaged drinking water related business experienced a decline.

Nongfu Spring mentioned in the announcement that the group's packaged drinking water products sold well in January and February 2024, with sales revenue for the two months increasing by 19.0% compared with the same period last year. However, since the end of February 2024, a large number of public opinion attacks and malicious slander against the company and its founder have appeared on the Internet, which has had a serious negative impact on its brand and sales, causing the revenue of Nongfu Spring's packaged drinking water products to fall sharply for the first time.

Finally, in the first half of 2024, the Group recorded packaged drinking water product revenue of 8.531 billion yuan, a decrease of 18.3% from the same period last year, accounting for 38.5% of total revenue.

Since March this year, Nongfu Spring has clarified the truth to the public through various means.

On May 20, Nongfu Spring published an article on its official account titled "What is important is the truth, and the judgment of right and wrong based on the facts themselves." The article summarized the rumors about Nongfu Spring and its founder Mr. Zhong Shanshan circulating on the Internet and stated that it would pursue legal responsibility.

Nongfu Spring responded in the article:

Nongfu Spring's total tax payment in 2023 was 6.8 billion yuan, and there has never been any tax evasion as mentioned on the Internet.

Nongfu Spring has never published any acid-base body type theory, nor has it been named by CCTV on March 15.

As of the end of March 2024, the total social donations of Nongfu Spring, also known as Yangshengtang Group, exceeded 900 million yuan, which is not the case as rumored on the Internet that it does not engage in charity.

Nongfu Spring has never been flattering Japan. The label story of its product Oriental Leaf Green Tea is based on the history of China's Jingshan Temple, showing the cultural power of Chinese tea influencing the world. The pagoda pattern on the label is based on the image of the ancient pagoda in the Southern Dynasties.

All of Nongfu Spring’s water sources are high-quality domestic natural water sources.

The Chinese beverage industry still has huge market potential, and brand competition is becoming increasingly fierce. Nongfu Spring said that as consumers' demand for healthier beverages becomes more obvious, the market is also moving towards a more natural, healthier and more innovative direction. Among them, sugar-free tea is the most representative, and has maintained rapid growth in recent years.

In the first half of this year, the Group's tea beverage products continued to maintain rapid growth, recording revenue of RMB 8.43 billion during the reporting period, a year-on-year increase of 59.5%, accounting for 38% of total revenue.

Among them, Nongfu Spring's representative tea beverage brand Oriental Leaves still maintains strong competitiveness. According to Nielsen retail data, Oriental Leaves' sales in January-June 2024 increased by more than 90% year-on-year, almost doubling compared with January-June last year. So far, Oriental Leaves has a market share of more than 70% in the sugar-free tea market, occupying an absolute dominant position.

Zhong Shanshan has publicly responded to many controversial topics

Nongfu Spring mentioned in the announcement that online public opinion in the first half of the year had an impact on the group's brand image and sales of packaged drinking water products. However, with its strong comprehensive strength and adherence to the right path, the group has full confidence and ability to meet and respond to various opportunities and challenges.

On the evening of August 10, in the "Dialogue" column of CCTV Finance Channel, Nongfu Spring Chairman and General Manager Zhong Shanshan made a rare public statement and responded to many controversial topics in public opinion.

He mentioned: "Tea is actually very, very Chinese, and is a product with Chinese soul. I want to use industrial means to organize farmers to concentrate their production, so that tea can be popularized in thousands of households, and (as) a very elegant civilization on the land of China, it can be spread to the world again!"

Regarding the view on the Internet that the richest man in the United States builds rockets, while the richest man in China sells water, so they are relatively "watery", Zhong Shanshan said: "I sell water. I am a farmer myself. I tend to think more about doing things from the perspective of a farmer and from my knowledge. I am not that great. I think as a Chinese entrepreneur I have my own pride. I have solved problems that Americans have not solved, and I have maintained the normal income of farmers. So I am also proud of myself, although I am not as earth-shattering as Musk."

In addition, Zhong Shanshan said that his knowledge has broadened over the years, his gray hair has increased, and he has stepped on many pitfalls in the past 20 years, but the pitfalls are valuable. He said that becoming the richest man has not changed his life. From the perspective of wealth itself, wealth is a reward from consumers to entrepreneurs, but the richest man has a negative connotation in China. Specifically, Zhong Shanshan believes that we have made a step from agricultural civilization to industrial civilization, but in this process, the cognition of wealth, what kind of meaning wealth is, what responsibilities and values ​​it has, etc. have not been fully interpreted.

Zhong Shanshan said that the wealth responsibility of the richest man should include altruism that is specific and executable, and should guide and encourage it to become a trend. Regarding becoming the richest man, Zhong Shanshan said that he is a lucky man of the times. "But becoming the richest man has made me lose my freedom. I hope to have private space. I am very confident about my own ending. I started from scratch and every penny is clean. I am very satisfied with the current level of treatment of upstream and downstream and employees."

Nongfu Spring said that it will continue to strengthen brand building, increase publicity of water sources and upgrade and innovate beverage products in the future, further develop and consolidate the dual-engine structure of water and beverages, and continue to strengthen Nongfu Spring's brand foundation and competitive advantages. As for enterprises and individuals who spread rumors and slander and defame Nongfu Spring, the group will resolutely pursue their legal responsibilities, uphold justice, and never back down.