Luzhou Laojiao Co.,Ltd
SZSE-000568
Company Overview
Luzhou Laojiao Co.,Ltd. engages in the research and development, production, and sales of liquor products in China. The company provides National Cellar 1573, Century-old Luzhou Laojiao Jiaoling, Luzhou Laojiao Tequ, Touqu, Erqu, and other liquor series products. It also offers agricultural product planting and sales, supply chain management business, technology and business development, import and export trade, and tourism services. In addition, it engages in the manufacture and sale of fruit and health care wines; production and sale of red wine; and fermented products. The company was formerly known as Luzhou Laojiao Brewery. Luzhou Laojiao Co.,Ltd. was founded in 1950 and is headquartered in Luzhou, China.
Name
Luzhou Laojiao Co.,Ltd
CEO
Feng Lin
Website
www.lzlj.com
Sector
Beverages
Year Founded
1950
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Bulls Say
As one of the three leading premium brands in China, Laojiao is well positioned to capture the baijiu sector’s premiumization.
Laojiao has been able to focus on its core competency amid premiumization, with strong product mix upgrade and rising channel penetration driving robust sales growth since 2015.
Laojiao has motivated management through a stock incentive plan and cemented relationships with core distributors through private share placement. This has aligned shareholder interests with both management and distributors, helping drive long-term healthy growth.
Bears Say
The baijiu sector is more cyclical than other consumer staple industries, particularly in the premium segment.
Laojiao has the smallest revenue share among the three premium baijiu brands, accounting for 8% compared with 26% share for Moutai and 56% of Wuliangye. Limited capacity remains a long-term constraint for Laojiao’s market share expansion.
The baijiu sector, particularly premium baijiu, is subject to heavy regulation and social risks of reduction in alcoholic beverage. Anti-extravagance measures may also dampen demand.