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Chinese Bottled-Water Giant Nongfu Spring Rises on Buyback Plan

By Sherry Qin


Nongfu Spring shares jumped after its majority shareholder's plan to boost his stake in the Chinese bottled-water giant.

Shares of the Hangzhou-based company rose as much as 8.1% early Wednesday before paring gains to trade 5.0% higher at HK$35.45.

Nongfu Spring's billionnaire founder and controlling shareholder Zhong Shanshan, via controlled entity Yangshengtang, plans to purchase up to HK$2 billion (US$256.0 million) of shares from the open market in about six months, according to an exchange filing after Tuesday's market close.

Nongfu's shares have weakened recently, given market concerns about its first-half revenue, Citi analysts Xiaopo Wei and Vincent Young said.

Heavy rain has affected much of southern China in recent weeks, which could hurt Nongfu's water business, they said in a research note.

Meanwhile, Zhong faced a barrage of online criticism in March from Chinese social-media users questioning his loyalty to China. The weekslong assault caused a drop in Nongfu's shares, which remain more than 20% lower so far this year.

Zhong's share-buyback plan aims to "demonstrate his confidence in the company's growth prospects as well as recognize the company's intrinsic value," the analysts said.


Write to Sherry Qin at


(END) Dow Jones Newswires

July 09, 2024 23:44 ET (03:44 GMT)

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