The water business of the richest man, Zhong Shanshan, generated 52.5 billion in sales in one year.

Ask AI · How Zhong Yijie Used Philanthropic Strategy to Turn Around Corporate Image?

Business giving back to charity is a common move for many companies.

But when it comes to charity, most companies follow the philosophy of doing good deeds without seeking recognition. After completing charitable initiatives, they usually do not proactively promote them.

In today’s new public-opinion environment, not proactively promoting is not only “not the right choice,” but can also be detrimental to a company’s ability to build a good public image.

Over the past two years, tycoon Zhong Yijie has been thrust to the forefront of public debate and controversy.

During that period, not only did Zhong Yijie’s personal reputation suffer a severe blow, but the company’s products also faced market pressure. As a result, Nongfu Spring’s stock price once fell below HK$23, hitting a new low since its listing.

Faced with the surging public-opinion storm, Zhong Yijie conducted deep reflection.

In the realm of philanthropy, this tycoon no longer remained “low-key”; in the business arena, Zhong Yijie chose to take the initiative.

Facing the cameras, Zhong Yijie became briefly choked up, saying, “Our money is clean—every bottle of water sold by all employees, bottle by bottle.”

He has always firmly believed: “Day will definitely break.”

Fortunately, in 2025, Zhong Yijie saw a reversal in public opinion, and Nongfu Spring’s market value also returned to above RMB 500 billion Hong Kong dollars. In that year, with a net worth of RMB 530 billion, Zhong Yijie topped the Hurun Rich List for the fourth time, setting a fresh record for “China’s richest person” wealth; meanwhile, with US$77.1 billion in wealth, he ranked as Forbes China’s richest person in Mainland China for five consecutive years.

In March 2026, a global rich list released by the Hurun Research Institute showed that, at age 72, Zhong Yijie ranked second among China’s entrepreneurs with RMB 515 billion, with year-over-year wealth growth of 35%.

More importantly, in this round of crisis, Nongfu Spring was reborn and recovered strongly, with revenue hitting an all-time high.

In its financial report, Nongfu Spring’s chairman Zhong Yijie specifically thanked all company employees and business partners for their joint efforts, and said the new management team successfully passed the test of public sentiment.

When things turn for the better, results reach new highs

The highest level of enterprise is not huge scale, but steady progress over the long term.

Zhong Yijie once said that people can’t possibly not drink water. Drinking water is a long-term product, and the product cycle needs to be at least a hundred years.

For this reason, after going through a period of phased decline in the drinking-water business and then returning to the growth track again, Nongfu Spring has become more resilient than before, and its development is also healthier.

Recently, Nongfu Spring released its 2025 financial results. The data show that the company achieved full-year revenue of RMB 52.55B, up 22.5% year over year; attributable net profit was RMB 15.87B, up 30.9% year over year.

It is reported that this is Nongfu Spring’s first time its revenue has broken through the RMB 50 billion mark. Its business scale surpassed the combined revenue from the beverage business of 康师傅 (Kangshifu) and Coca-Cola China.

Benefiting from lower purchase prices of raw materials such as PET, paper cartons, and white sugar, together with the company proactively optimizing the sales mix of its e-commerce channels, Nongfu Spring’s 2025 gross margin broke through 60.5%, with net profit margin over 30%, reaching the highest level since 2017.

Looking at it in detail, Nongfu Spring’s revenue is mainly divided into four major segments: packaged water, tea drinks, functional beverages, and juice beverages. The financial report shows that all four segments achieved double-digit growth, performing better than market expectations.

Among them, in 2025, the company’s tea-drink revenue reached RMB 21.6B, accounting for 41.09% of total revenue. This marks the first time Nongfu Spring’s tea-drinks segment has surpassed packaged water to become the company’s largest source of revenue.

For Nongfu Spring, the breakthrough in the tea-drinks segment signals that the company’s valuation may be rebuilt. After all, the tea-drinks business has larger profit margins and higher growth potential. The financial report shows that tea-drinks segment revenue rose from RMB 4.6 billion to RMB 21.6 billion in just four years.

In 2025, the packaged water segment achieved revenue of RMB 18.71B, accounting for 35.60% of the company’s total revenue. Worth noting is that in 2025, Nongfu Spring’s packaged water segment grew 17.3% year over year, officially returning to the growth range—an important milestone for the company’s development.

In addition, in the second half of 2025, Nongfu Spring stopped routine promotional campaigns, did not engage in price wars, and packaged water business growth also met the expected targets.

As of now, Nongfu Spring has completed a nationwide rollout covering 16 high-quality water source regions across the country, and has also built a comprehensive water-conveyance system and production network nationwide. Even if the average transportation radius for a single plant reaches 500 kilometers, the company continues to optimize supply efficiency and cost control through large-scale, grid-based layout.

Zhong Yijie said that the scaled layout of water-source regions allows the company, as price competition in the industry intensifies, to achieve both cost stability and supply stability—an essential advantage for enterprises to cross industry cycles.

The functional beverage segment achieved revenue of RMB 5.76B in 2025, up 16.8% year over year, accounting for 10.96% of the company’s operating revenue; juice beverage revenue was RMB 5.18B, up 26.7% from the same period last year, accounting for 9.85% of operating revenue.

It is worth noting that although Nongfu Spring’s four major segments achieved strong growth against the trend, the company’s marketing investment did not increase significantly. The financial report shows that in 2025, Nongfu Spring’s selling expenses were RMB 9.8 billion, up 6.8% year over year. This accounted for 18.6% of operating revenue, down 2.8 percentage points from 21.4% in the same period last year.

As performance returned to a positive track, Zhong Yijie also returned to being low-profile again. He gradually faded from the public eye, and the frequency of his public statements has been far lower than during the period when public opinion exploded.

The boat has already passed ten thousand heavy mountains

With packaged drinking water back in the growth range, Nongfu Spring’s “keystone” business is becoming even more solid.

In 2025, Nongfu Spring added three major water source regions: Hunan’s Badianshan, Sichuan’s Longmenshan, and Tibet’s Nyainqêntanglha. In early 2026, it further laid out Yunnan’s Jiaozi Snow Mountain. So far, it has built 16 high-quality natural water source regions nationwide, creating resource barriers that are difficult to replicate.

After the financial report was released, a research note from Lien (Lyons) stated that Nongfu Spring’s 2025 performance was strong, with both second-half sales and net profit outperforming expectations. Management revealed that performance from 2026 to date has been in line with the full-year target of achieving double-digit revenue growth.

The firm forecasts that the company’s 2026 revenue and profit will grow 14% and 14% year over year, respectively, and it also raises its net profit forecasts for 2026 and 2027 by about 1% each to reflect strong sales growth and profit-margin expansion. Its target price is raised from HK$57.6 to HK$59.6, reaffirming a rating of “high confidence in beating the market.”

A research note from Morgan Stanley said that Nongfu Spring’s 2025 revenue was RMB 52.6 billion, up 23% year over year. Driven by the steady performance of tea drinks, functional beverages, and juice products, results slightly exceeded market expectations.

The firm pointed out that in 2025, Nongfu Spring’s net profit was RMB 15.9 billion, up 31% year over year, roughly in line with the firm’s expectations and 5% above market forecast. This means that in the second half of 2025, net profit grew 40% year over year. The operating profit margin improved by 4.6 percentage points year over year to 36.7%, which was 0.9 percentage points higher than the firm’s estimate. The dividend payout ratio was 70%; in 2024 it was 71%, matching the firm’s estimate.

Citigroup published a research note stating that Nongfu Spring’s revenue growth and net profit margin performance are stronger than peers, and it was relatively less affected by PET cost fluctuations. The firm maintained its target price of HK$58.5 and a “Buy” rating, viewing Nongfu Spring as the preferred target in China’s beverage sector.

Nongfu Spring’s 2025 core net profit increased 31% year over year, which is 6% above market expectations. The main reason is that revenue growth exceeded expectations. The firm said that sales growth across Nongfu Spring’s categories accelerated further in the second half of 2025 compared with the first half, exceeding market expectations. Benefiting from positive operating leverage, the year-over-year increase in profit before interest and taxes rose from 29% in the first half to 48% in the second half, and the year-over-year increase in net profit also rose from 22% in the first half to 40% in the second half.

A research note from Bank of America Securities said that Nongfu Spring’s full-year 2025 performance comprehensively exceeded expectations. Sales and after-tax net profit increased 22.5% and 30.9% year over year, respectively; in the second half, they grew 30% and 40.2%, respectively, with performance exceeding the firm’s expectations. The firm raised its EPS forecasts for the group for 2026 to 2027 by 8% and 6%, respectively, raised its target price from HK$56 to HK$60, and reaffirmed a “Buy” rating.

The firm expects that in 2026, the group’s sales will achieve mid-teens growth, driven mainly by three areas: in the packaged water business, supported by intensified channel investment, revenue is expected to return to the 2023 level; in the tea-drinks business, thanks to continued flavor innovation and the broad rollout of large-pack products, the momentum of sales growth is expected to continue; in the juice business, by closely capturing consumers’ demand for healthy, high-quality products, the group is expected to outperform the industry benchmark, and new categories such as coffee and electrolyte water will also provide additional growth momentum.

Caijing believes that after enduring both public-opinion and market tests, Nongfu Spring’s revenue structure has become healthier than before. In particular, the tea-drinks segment has replaced packaged water as the company’s first-largest revenue source, and its extremely high growth rate has opened up imagination space for further earnings growth. From the current industry environment, due to the overall poor market sentiment, Nongfu Spring’s valuation is, to some extent, being suppressed. It is expected that once the industry returns to a favorable cycle in the future, Nongfu Spring’s valuation will see a substantial increase.

Author statement: personal views only, for reference