Nongfu Spring Co., a leading Chinese beverage company, saw its stock price plummet 10.75% in pre-market trading on Wednesday. The sharp decline comes in the wake of the company's disappointing 2024 financial results, which revealed the slowest annual profit growth since its initial public offering in 2020.

According to the company's exchange filing on Tuesday, Nongfu Spring's net income grew by a mere 0.4% to 12.1 billion yuan ($1.7 billion) in 2024, falling short of analysts' expectations of 12.5 billion yuan. The underwhelming performance can be attributed to a series of public relations challenges that the company faced throughout the year, including calls for boycotts from nationalist internet users and quality concerns raised by Hong Kong's Consumer Council.

The controversy surrounding Nongfu Spring's products took a toll on its core business, with sales from water products declining by 21%. Despite this setback, the water segment's proportion of total revenue slightly increased to 42.9 billion yuan. The company's founder, Zhong Shanshan, acknowledged the "historical test" posed by the online backlash but emphasized that Nongfu Spring's packaged water products maintained their leading market share. As investors digest this news, the significant stock price drop reflects growing concerns about the company's ability to navigate challenges and maintain its growth trajectory in the competitive Chinese beverage market.