Wuliangye Yibin Co.,Ltd.
SZSE-000858
Company Overview
Wuliangye Yibin Co.,Ltd. manufactures and sells liquor and wine products under the Wuliangye brand in China. The company's products include Baijiu series, such as Wuliang Chun (Spring), Wuliang Chun (Rich Flavor), Wuliang Tequ, and Jianzhuang; and base fruit liquor. It is also involved in printing, plastic product, glass bottle, and other businesses. The company was founded in 1997 and is headquartered in Yibin, China.
Name
Wuliangye Yibin Co.,Ltd.
CEO
Xin Zhang
Website
www.wuliangye.com.cn
Sector
Beverages
Year Founded
1997
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Bulls Say
Wuliangye is widely known as the best strong-aroma baijiu producer in China. Its strong brand and extensive distribution network should help the firm succeed in its expansion into the high-end market.
Premium baijiu is an affordable luxury category that should benefit from long-term demand growth from aspirational and high-income consumers.
With substantial cash in its balance sheet, the company can pursue merger and acquisition opportunities to further consolidate its leading position in the liquor industry.
Bears Say
The baijiu sector is more cyclical than other alcoholic beverages, an economic slowdown weakens the demand for baijiu, including Wuliangye.
As competition in the midrange-priced baijiu market intensifies, Wuliangye’s decision to narrow its midrange to low-end product series could lead to some market share losses.
Wuliangye's distributors' profit margin is about 8%-10%, compared with more than 100% for Moutai. We think the firm may need to raise the distributors' profit margin as an incentive for higher sales.