On August 31, 5100 Cang Ice River (01115.HK) released its 2026 interim results. In the first half of the year, revenue reached RMB 221 million, up 31.2% year-on-year; net profit attributable to shareholders was RMB 71.375 million, up 97.2% year-on-year. This is the second consecutive growth report card for the company after years of losses. Chairman Chen Di said in a letter to shareholders that the company is standing at a historic node where the value of global water resources is being revalued.
The financial statements in the same announcement show that as of June 30, the company's cash and cash equivalents were 7.57 million yuan, down from 96.74 million yuan at the beginning of the year. The company reported a half-year profit of 71.37 million yuan, while its cash balance decreased by 89.17 million yuan. Correspondingly, the net accounts receivable increased from 205 million yuan to 301 million yuan, and there was also a 1.028 billion yuan accounts receivable from third parties.
The Mystery of Doubled Profits
The announcement showed that the pre-tax profit for the first half of the year was 7.705 million yuan, of which the item "other income, net" was 2.717 million yuan, including a foreign exchange gain of 2.229 million yuan and government subsidies of 571,000 yuan. The company's functional currency is the Hong Kong dollar, and its financial statements are presented in renminbi, with three tranches of Hong Kong dollar-denominated convertible bonds having been issued. During the reporting period, the renminbi appreciated against the Hong Kong dollar, and the amount of liabilities denominated in Hong Kong dollars decreased when converted to renminbi, resulting in a non-cash accounting gain on the income statement.
In the same report, other comprehensive income included a foreign exchange difference of -21.25 million yuan due to the translation of functional currency into the presentation currency, which was in the opposite direction and similar in amount to the profit in the income statement. As a result, the company's total comprehensive income for the period was only 50.12 million yuan, lower than the net profit of 71.37 million yuan. Government subsidies were business support funds issued by local authorities, noted in the announcement as "discretionary grants." The total of foreign exchange differences and subsidies was approximately 28 million yuan, accounting for 36% of pre-tax profit.
On the revenue side, the increase did not come from the water business. In the first half of the year, revenue increased by 52.59 million yuan compared to the same period last year, with the beer division contributing 41.41 million yuan and the water business division contributing 11.28 million yuan. Water business revenue was 129 million yuan, up 9.6% year-over-year, with the company announcing that the division implemented both price increases and sales volume growth; beer division revenue was 91.67 million yuan, up 82.4% year-over-year.
The cost structure of the beer division is worthy of attention. Revenue increased by 41.41 million yuan, while sales costs only rose from 40.83 million yuan to 46.95 million yuan, an increase of 15%, and the gross margin expanded from 18.8% in the same period last year to 48.8%, improving by 30 percentage points in the first half of the year, outpacing national brewers such as Tsingtao Beer and China Resources Beer. The announcement attributed this to "increases in both volume and price" and optimization of the product structure.
During the same period, the company reported authorized revenue of 4.3 million yuan, compared to zero in the same period last year; in the 2025 annual report, the beer gross margin saw a significant increase, with the company attributing this to the confirmation of authorized revenue.
The risk of revenue collection is reflected in the segmental information disclosed in the announcement. In the first half of the year, the beer segment provisioned RMB 7.97 million for expected credit losses on financial assets, while the water business segment reversed RMB 7.055 million, and the corporate and other segments provisioned an additional RMB 6.41 million. The total net impairment recorded in the consolidated income statement was RMB 1.556 million. The composition of this RMB 1.556 million is also noteworthy: according to the notes to the financial statements, the provision for other financial assets measured at amortized cost was RMB 15.45 million, while the provision for trade receivables was RMB 0.11 million. In the first half of the year, trade receivables increased by RMB 95.76 million, with a corresponding net provision of RMB 0.11 million.
A larger exposure lies in accounts receivable. As of June 30, the net balance of trade receivables was 301 million yuan, an increase of 95.76 million yuan from the beginning of the year, which is 1.8 times the incremental revenue for the same period, and equivalent to 1.36 times the company's total revenue for the first half of the year.
The accounts receivable breakdown shows that the company's receivables within six months increased from 114 million yuan to 202 million yuan; those over two years decreased from 96.57 million yuan to 41.81 million yuan, a reduction of 54.76 million yuan. The company categorizes accounts receivable by invoice date, and as time passes, the same receivable automatically enters a longer accounts receivable period. At the end of last year, 33.27 million yuan of accounts receivable with an age of one to two years should have been included in the category of over two years by the end of June this year, but the balance in this category instead decreased. During the same period, the total amount of allowance for bad debts decreased from 95.18 million yuan to 79.79 million yuan. The announcement did not specify whether the reduction of over 50 million yuan in long-outstanding accounts was due to recovery or write-off.
The company provides a credit period of 90 to 180 days for distributors, and management stated in discussions and analyses that it has offered credit and account periods to support strategic cooperative distributors in expanding their business, with "good repayment conditions after the period." As of June 30, the company's bank borrowings due within one year totaled 349 million yuan, with 194 million yuan in convertible bond liabilities, and cash on the balance sheet of 7.57 million yuan. In the first half of the year, the company added two new bank loans, increasing the total loan amount from 321 million yuan to 480 million yuan.
It lost 1 billion yuan over three years.
The starting point of 5100's business model was an exclusive sales contract. Starting from August 2007, the Ministry of Railways provided 5100 Tibetan Glacier Mineral Water free of charge to passengers on some high-speed trains; from 2008 to 2010, the Ministry of Railways purchased approximately 200 million bottles. According to the prospectus, sales from China Railway Express accounted for 76.8%, 81%, and 80.5% of the company's annual revenue in 2008, 2009, and 2010, respectively.
On June 30, 2011, the company was listed on the Hong Kong Stock Exchange. Half a month after its listing, it announced that China Railway Express had replaced its procurement contract, resulting in a sales decline of nearly two-thirds, and the procurement contract between the two parties was changed from a long-term agreement to a one-year contract. After the railway system's anti-corruption case in 2013, the company issued a clarifying announcement. In 2015, its cooperation with China Railway Express ended, and the company was renamed Tibet Water Resources. It then relied on e-commerce platforms, convenience stores at gas stations, and other channels, and launched a water card for family users. In August 2014, Sinopec Sales Company and its subsidiary, Tibet Highland Natural Water, jointly launched the Easy Joy Zhuoma Spring brand. In October of the same year, Sinopec acquired a 40% stake in Highland Natural Water. In 2019, China National Petroleum Corporation invested in Yarrashamba, and Gesang Spring entered the Kunlun Good Guest convenience store chain. In March 2021, the company acquired a 31% stake in Yarrashamba for 465 million yuan.
In January 2017, the original controlling shareholder sold approximately 28% of its shares within two days, with 18% transferred to the Horgos Tianshan No. 1 Industry Investment Fund at HK$3.5 per share. The company announced that the original controlling shareholder would no longer be the controlling shareholder. In the same year, the company's revenue peaked at RMB 932 million, and then declined year by year. In 2019, revenue was RMB 721 million, with a net loss of RMB 745 million. From 2022 to 2024, the company reported losses of RMB 102 million, RMB 353 million, and RMB 574 million, respectively, with a total loss of over RMB 1 billion in three years. Revenue fell to RMB 226 million in 2024. Over the six-year period, the company incurred losses for four years, with a cumulative loss of nearly RMB 1.8 billion.
2025 was a turning point. The company issued three tranches of convertible bonds, with a total principal amount of HK$600 million, of which two tranches were fully converted into shares in the same year, increasing the company's share capital from 4.579 billion shares at the end of 2024 to 5.588 billion shares. In October, the company changed its name to 5100 Tsing Ice Spring. The company's revenue for the year was RMB 358 million, achieving a turnaround from losses. In the first half of this year, the third tranche of convertible bonds was converted into 40 million shares.
Management changes occurred during the period. In February 2026, Du Hui resigned as co-chief executive officer. Following the annual general meeting on June 26, independent non-executive director Lu Weixiong retired, leaving the company in breach of three listing rules: the board has no independent non-executive director with accounting or financial management expertise, the audit committee has fewer than three members, and no one qualifies as chairman of the nomination committee. The audit committee reviewing the interim results now has two members. Another independent non-executive director, Zheng Jue, was absent from the AGM due to other business commitments. The company said it expects to fill the vacancies within three months.
In June this year, the company announced the acquisition of Shannan Water Source, with a consideration of 237.6 million yuan, paid entirely in 380 million new shares, equivalent to approximately 0.625 yuan per share. The announcement stated that the issue price was about 80% higher than the previous closing price. Nine years ago, when the company's control was transferred, its shares were valued at 3.5 Hong Kong dollars per share.
Upscale water that's struggling to gain traction
Industry data shows that in 2025, the Chinese packaged drinking water market was approximately 220 billion yuan in size, with Nongfu Spring and China Resources C'estbon together accounting for nearly half of the market share, and the price war driven by Green Bottle Pure Water has pushed mainstream packaged water prices to a low level.
High-end mineral water is one of the faster-growing segments, with a retail scale of 24.258 billion yuan in 2025, representing a year-on-year increase of 11.3%. Participants include brands such as Yiyun, Kunlun Mountain, Baishui Mountain, and Diqiu Disan Ji, among others, which share the same water source in Tibet. To date, 56 natural drinking water production enterprises in the Tibet Autonomous Region have obtained food production licenses, of which six are large-scale enterprises.
CNY 2.4258 billion is the retail sales figure, while the CNY 129 million water business revenue of 5100 in the first half of the year is based on the ex-factory price, and the two numbers cannot be directly compared. Even if the industry's common ex-factory price and retail price multiplier is used for conversion, 5100's position in the high-end water market is still at the bottom: the company's annualized water business revenue is less than CNY 300 million, while brands such as Kunlun Mountain and Baishui Mountain have annual sales of tens of billions of yuan. The company currently has a water production capacity of 300,000 tons and a beer production capacity of 2 million hectoliters (1 hectoliter equals 100 liters, equivalent to approximately 200,000 tons), which is the same as the same period last year; in the first half of the year, it purchased properties, factories, and equipment for CNY 2 million, rented out some production lines to affiliated companies, and collected rent of CNY 25.75 million in six months. Despite underutilized production capacity, the company plans to build a new mother and baby dedicated water base with an annual production capacity
In terms of channels, the competition among leading brands has shifted towards instant retail and terminal density. According to calculations by the Ministry of Commerce's International Trade and Economic Cooperation Research Institute, China's instant retail market is expected to reach approximately 97.14 billion yuan in 2025, representing a 24% year-on-year increase (note that different institutions have varying statistics, with some estimating the scale to exceed 180 billion yuan). After losing the railway channel, 5100 has turned to special channels such as JD Home Delivery, aviation, cinemas, and hotels, as well as the "Tong Tong" water delivery card targeting families. The delivery card involves collecting payment before delivering water, with contract liabilities of 35.196 million yuan, an increase of only 3.35 million yuan from the beginning of the year. Meanwhile, accounts receivable increased by 95.76 million yuan during the same period. Transportation costs for the first half of the year totaled 15.08 million yuan, up 43% year-on-year, accounting for 6.8% of revenue. This expense fluctuates with changes in shipment volume and frequency, and is a necessary logistics cost for shipping from Tibet to inland areas, with a growth rate far exceeding the 31.
Overseas, the company disclosed that it obtained halal certification in Malaysia in May and signed a contract with a local general agent in August. In July, it granted the agency rights for Hong Kong and Macau to Kwong Mei Wan, and fully sponsored the 2026 Hong Kong Miss Pageant. The mid-term performance did not disclose revenue by region, and the scale of overseas sales is unknown. In the first half of the year, advertising and market promotion expenses were 20.789 million yuan, of which 16.281 million yuan was share payment generated by granting share purchase rights to distributors, with an exercise price of 0.60 Hong Kong dollars, and requiring the sales target to be completed within 12 months. Excluding this non-cash expenditure, the actual investment was approximately 4.5 million yuan.
The announcement showed that no interim dividend will be distributed for the period, the same as the previous year. As of June 30, the company's total assets were RMB 3.911 billion, comprising RMB 721 million in goodwill, RMB 764 million in investments in associate companies, RMB 1.028 billion in receivables from third parties, RMB 282 million in properties, factories and equipment used for water and beer production, and RMB 7.57 million in cash.
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