Equity Analyst

Steve Zhou, CFA

Over 13 years of professional experience covering mainly Asian consumer companies in sell-side and buy-side.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nongfu-spring-co-ltd" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> has been trading flat since April 2021, even though earnings have grown 36% yoy in 2021, 19% yoy in 2022, and 25% yoy in 1H23.</li>
<li>We believe a forward PE lower than 35x would be a great entry price for Nongfu (37x currently), with upside potential in earnings from explosive growth in unsweetened tea.</li>
<li>A business that has a long run-way for growth, strong management, strengthening moat, great cash flow, and on top of that counter-cyclical, deserves a premium valuation anywhere in the world. </li>
</ul>



Nongfu Spring (9633 HK) has been trading flat since April 2021, even though earnings have grown 36% yoy in 2021, 19% yoy in 2022, and 25% yoy in 1H23.
We believe a forward PE lower than 35x would be a great entry price for Nongfu (37x currently), with upside potential in earnings from explosive growth in unsweetened tea.
A business that has a long run-way for growth, strong management, strengthening moat, great cash flow, and on top of that counter-cyclical, deserves a premium valuation anywhere in the world. 


Nongfu Spring (9633 HK):  Within Striking Distance