Is Nongfu Spring (SEHK:9633) Turning R&D Control Into a Lasting Brand Advantage?

• In December 2025, Nongfu SPRING Co., Ltd. announced renewed three-year framework agreements with Yangshengtang Group covering basic R&D, testing services, and purchasing arrangements effective from January 1, 2026 to December 31, 2028.
• The renewed R&D and test service framework centralizes intellectual property ownership for work products with Nongfu’s group, highlighting how the company is formalizing control over innovation supporting its expanding beverage portfolio.
• With new R&D agreements underpinning product development, we’ll explore how this, alongside ready-to-drink category expansion, shapes Nongfu Spring’s investment narrative.

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What Is Nongfu Spring's Investment Narrative?

To own Nongfu Spring, you need to believe its brand strength and execution in packaged beverages can justify a premium valuation while earnings keep growing in line with recent double digit trends. The renewed three year R&D and purchasing frameworks with Yangshengtang look like continuity rather than a step change, but they do tighten Nongfu’s grip on intellectual property just as it pushes deeper into ready to drink tea and coffee. That can support short term catalysts around product launches and category mix, even if the agreements themselves are unlikely to move the earnings needle near term. Against this, the stock’s rich price to earnings multiple and relatively low board independence remain front of mind risks if growth or governance disappoints.

However, one governance issue in particular is worth understanding in more detail. Nongfu Spring's shares have been on the rise but are still potentially undervalued by 10%. Find out what it's worth.

Exploring Other Perspectives

Three Simply Wall St Community fair value views span about HK$44.57 to HK$53.37, underscoring how differently retail investors frame Nongfu’s premium multiple. Set this against recent R&D moves and product expansion, and you can see why opinions on future execution and risk are so varied.

Explore 3 other fair value estimates on Nongfu Spring - why the stock might be worth as much as 11% more than the current price!

Build Your Own Nongfu Spring Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Nongfu Spring research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Nongfu Spring research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Nongfu Spring's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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