Table of contents
Pricing power is becoming crucial....................................................................................................6
Challenges from inflation .............................................................................................................6
Who are the price-makers? .........................................................................................................6
Grape wine: A v魌re sant? ...............................................................................................................9
Low base, huge potential.............................................................................................................9
Key driver: desire for healthy and premium lifestyle ............................................................... 10
Eyes on the mid-range and high-end markets ........................................................................ 10
Supportive policies and improving product quality.................................................................. 11
Key risks.................................................................................................................................... 11
Hard liquor: a mixed bag................................................................................................................ 13
Again, eyes on the upper-end market...................................................................................... 13
Ongoing industry consolidation ................................................................................................ 15
Easing tax burdens ................................................................................................................... 16
Valuation and stock picks .............................................................................................................. 17
Changyu Winery: ripe for the picking....................................................................................... 19
Kweichow Moutai: becoming an asset play............................................................................. 19
Luzhou Lao Jiao: a phoenix reborn.......................................................................................... 20
Wuliangye: waiting for a catalyst .............................................................................................. 20
Appendix I: Company section........................................................................................................ 22
Yantai Changyu Pioneer - A ?Ripe for the picking................................................................. 23
Yantai Changyu Pioneer-B ?Ripe for the picking................................................................... 24
Kweichow Moutai (600519.SS / 600519 CH) ?Becoming an asset play ............................. 39
Luzhou Laojiao ?A phoenix rising .......................................................................................... 50
Wuliangye Yibin ?Waiting for a catalyst.................................................................................. 65
Appendix II: Strong and sustainable demand on alcoholic drinks .............................................. 78
Appendix III: Map of domestic hard liquor producers .................................................................. 79
Appendix IV: Product appearances .............................................................................................. 80