Drink the moist field water, and the CITS United Group will be relieved of all the hardships.

Zebra Consumption Chen Xiaojing

A bottle of Runtian water not only soothes people’s hearts, but also allows CITS United, which has been wandering at the bottom for many years, to usher in a substantial turnaround in its fundamentals.

Recently, the company disclosed operating data for the first three quarters of 2026. The core driver of the nearly 40% year-on-year increase in performance is the consolidated contribution from Runtian Industrial.

During the reporting period, the company has completed the divestiture of loss-making cultural and tourism assets and retained the two asset-light business segments of digital marketing and overseas shopping. In the future, these two major businesses will also form synergies with the main business of packaged water.

In the short term, Runtian Industrial has indeed helped CITS United get rid of the predicament of weak long-term profitability. However, in the medium to long term, Runtian Water still faces the greatest regional restrictions in order to maintain sustained and stable growth in the fiercely competitive packaged water industry.

In an industry environment where leading packaged water companies continue to sink channels and squeeze all links, the time window and market space left for “Jiangxi Provincial Water” to break through are tightening step by step.

After drinking “water”

After drinking “water”, the operating conditions of CITS United (600358.SH) ushered in substantial changes.

In the first three quarters of 2026, the company achieved operating income of 1.484 billion yuan and net profit attributable to the parent company of 101 million yuan, a year-on-year increase of 1.50% and 38.96% respectively.

In the first half of this year, the company’s overall operations were still in a quagmire, with operating income of only 245 million yuan and a net profit loss of 6.2149 million yuan attributable to the parent company.

Runtian Industrial was officially consolidated in August, and the listed company’s operating fundamentals experienced sudden changes overnight. In the third quarter, the company achieved operating income of 546 million yuan, a year-on-year decrease of 9.74%, but the net profit attributable to the parent company was 45 million yuan, a year-on-year increase of 28.07%. If nothing unexpected happens, the long-term loss situation will be completely reversed in 2026.

CITS United has a long history of losses. From 2023 to 2025, the cumulative loss of net profit attributable to the parent company exceeded 100 million yuan; deducting non-net profit was negative from 2004 to 2025.

During this period, the company’s main business changed several times. Before 2014, the core business was tourist attractions, tourist real estate and resort operations, and profitability was under long-term pressure.

In 2014, it started to divest tourism assets and transform into cultural, sports and digital content businesses. In 2016, it initiated the acquisition of Beijing New Line CTV, and completed the holding the following year, officially entering the Internet digital marketing track, and its main business changed accordingly.

In 2025, Internet digital marketing business revenue will be 316 million yuan, accounting for 74.00% of the company’s operating revenue. The customers of this business are highly concentrated, heavily dependent on the game industry, and strongly bound to the core founding team. As the game industry cycle declines, the operation of this business segment has weakened year by year.

In May last year, CITS jointly initiated the acquisition of 100% equity of Runtian Industrial, aiming to bring the high-growth drinking water business under its ownership. In July 2026, Runtian Industrial completed the equity transfer and became a wholly-owned subsidiary of the listed company.

Since then, the company has officially formed a new business structure with packaged water as its core business and collaborative development of digital marketing and cross-border e-commerce.

內外承壓

CITS jointly acquires Runtian Industrial, which is equivalent to holding a high-quality asset with stable cash flow and decent profit performance.

This is not just a simple change of main business, but also a key strategic choice for listed companies to completely reverse their long-term operating decline.

Runtian Water, a subsidiary of Runtian Industrial, has been deeply involved in the Jiangxi local market for a long time. Its offline channel network has already penetrated into towns and villages across the province. It is a local brand highly recognized by local consumers and is affectionately called “Save Water” by many Jiangxi people.

In the first three quarters of 2026, Runtian Industrial achieved operating income of 1.126 billion yuan, corresponding to a net profit of 191 million yuan (independent operating data).

According to the performance commitments made by the counterparty, Runtian Industrial’s non-net profits from 2025 to 2027 will be no less than 171 million yuan, 183 million yuan and 194 million yuan respectively.

Judging from the comparison of current operating data, in the first three quarters of 2026 alone, Runtian Industrial’s net profit has exceeded this year’s full-year performance commitment target and is basically the same as next year’s performance commitment line.

Judging from the current performance alone, it seems that it will not be difficult for Runtian Industrial to fulfill its three-year performance commitment. However, the competition in the domestic packaged water market has already entered a fierce stage. National brands such as Nongfu Spring and C’estbon continue to sink deeply into the low-tier market. Investors are generally worried that the expansion momentum of leading brands will inevitably further squeeze the existing living space of Runtian Water.

Once Jiangxi’s local fundamentals are impacted and the market outside the province fails to achieve breakthroughs, it will be difficult for Runtian Water to open up enough space in the medium to long term.

As a typical regional packaged water brand, Runtian Water’s core products are concentrated in the price range of 1 yuan to 2 yuan. Under the suppression of national brands’ channel penetration, price competition and other strategies, the profitability of popular aquatic products is likely to continue to be under pressure.

The long-term concentration of Runtian Water in Jiangxi Province has resulted in a weak market channel foundation outside the province, high investment in new market expansion, and a long cycle. Runtian Cui selenium-rich water priced at 3 yuan has not yet been widely distributed. The production capacity and sales volume of this high-margin product cannot be fully released in the short term, and it is difficult to contribute a large business increase.

出路未定

In the first three quarterly reports disclosed recently, CITS United has made it clear that it will focus on the main business of packaged drinking water, continue to empower Runtian Industrial in terms of channel expansion, production capacity layout, R&D innovation, etc., and promote the creation of a healthy beverage industry investment platform.

In other words, if the company breaks through the bottleneck of growth in the future, its focus will not be on selling Runtian affordable water, but on creating a business ecosystem that uses packaged water as its basic platform to achieve multi-category development.

This should be a strategic choice made after overall consideration of the current competitive landscape of the packaged water market.

From the perspective of channels, relying on Jiangxi’s local fundamental advantages, Runtian Shui has deep roots in the province, but it has not yet performed well in the market outside the province. It can only replicate its mature experience outside the province by strengthening the local sinking market, establishing special channels and e-commerce channels. At present, we have relied on the existing market foundation in the Northeast region to gradually build it into the second largest core market.

Judging from public information, in addition to packaged water, Runtian Industrial has also deployed honey water, sugar-free tea, soda water and other products, but these products are temporarily sold in the province.

CITS United is located in the state-owned assets system and has unique system resources, which is the advantage of special channel expansion. The company said that its products have been recommended in Jiangxi’s state-owned assets system; more than 80 hotels and 5 scenic spots under Jiangxi Changlv Group can also provide consumption scenarios for the products.

On the other hand, listed companies are implementing “downsizing” plans internally. According to the third quarterly report, the loss-making subsidiary Guogui Cultural Tourism was no longer included in the consolidated statements during the period, and the scenic spot investment and operation businesses were completely divested. Only two major asset-light businesses, including Internet digital marketing and overseas shopping, will be retained to form a synergistic effect with Runtian products in sales promotion.

In terms of production capacity, Runtian Industrial has identified water sources such as Mingyue Mountain selenium-containing mineral water and Ji’an Donggu high metasilicate mineral water to ensure its water source advantages, thereby creating mid-to-high-end products and expanding the East China market centered on Shanghai.

In the short term, Runtian Industrial has indeed improved CITS United’s operating fundamentals, but as a regional packaged water company, can it maintain growth in the medium and long term under the pressure of domestic leading companies?