In the key news on Hong Kong stocks, Nongfu Spring Co. (HK:9633) shares soared over 7% as of writing after the company received an apology from the Consumer Council over an inaccurate report on its products. Earlier this week, Nongfu’s shares declined by approximately 7% over two days following the release of a report by the Council questioning the safety of its products.
Year-to-date, the stock has lost nearly 20%. Nongfu shares were hit hard in March after its founder, Zhong Shanshan, faced criticism from nationalists, who accused him of lacking patriotism. Shanshan ranks among the wealthiest individuals in China.
Nongfu Spring specializes in producing natural spring water and various beverages.
Nongfu Spring Challenges Consumer Council Report
Earlier this week, the Consumer Council of Hong Kong issued a report on the taste and quality assessment of Nongfu Spring products, indicating that they have reached the EU’s maximum limit for bromate. The report stated that Nongfu Spring’s water contained three micrograms per litre of bromate. Bromate, a byproduct of water disinfection, can cause side effects when consumed in excessive amounts.
Later on, the company reached out to the Council, highlighting the errors in their report. The company argued that its water should be classified under the drinking water category instead of natural mineral water. According to EU safety standards, the acceptable level of bromate in drinking water is not more than 10 micrograms per litre. Nongfu Spring also stated that the report created a panic among its consumers, leading to significant losses.
As a result, the Consumer Council agreed to rectify its mistake and upgraded its rating for the product to a full score.
What is the Nongfu Spring Share Price Target?
According to TipRanks consensus, 9633 stock has a Moderate Sell rating based on one Hold and one Sell recommendation. The Nongfu Spring share price target is HK$34.95, which is 5.27% above the current trading level.
