Company introduction
Zhenjiu Li Du is a Chinese liquor company dedicated to providing sub-high-end liquor products with a focus on flavoring. According to Frost & Sullivan's data, in terms of revenue in 2021, the company ranked 14th among all Chinese liquor companies, with a market share of 0.8%. During the record period, the precious wine Lidu grew at a rate far exceeding the industry average. The company's growth is due to the growing popularity of sauce-flavored liquors in China and the consumer's love for high-end products, and the company expects it to continue to benefit from such market trends. In China, the company operates four major liquor brands, including the flagship brand Zhenjiu, the booming brand Li Du, and the four major liquor brands, including two leading regional brands, Xiang Jiao and Gaixiao. With such well-known brands, the company promotes traditional Chinese liquor culture by developing a wide variety of liquor products with rich aromas to satisfy different consumer preferences and seize a wider range of market opportunities.
For the year ending 2020 and 2021 to December 31, 2022, the Group's net profit split was approximately RMB 520.09 million, RMB 1,032.20 million, and RMB 1,029.87 million.
Company business highlights
Zhenjiu Li Du, a leading liquor company that promotes deep traditions and has gained solid brand popularity, is a leading Chinese liquor company dedicated to providing low-end flavoured liquor products. It is gaining momentum and brand influence. According to Frost & Sullivan's data, in terms of revenue in 2021, the company is the fourth largest private liquor company and ranked third among all liquor companies with three or more flavors. According to Frost & Sullivan's data, in terms of revenue in 2021, the company ranked 14th among all Chinese liquor companies, with a market share of 0.8%. Its flagship brand, Jinju (Aiming for Sauce-flavored Liquor Lovers) was China's fifth largest sauce-flavored liquor brand by revenue in 2021, and achieved the fastest growth among China's top five sauce-flavored liquor brands in the same year. In 2021, Zhenjiu Li Du was the fifth largest multi-flavored liquor brand in China in terms of revenue, and achieved the fastest growth among China's top five multi-flavored liquor brands in the same year. The foundation of Zhenjiu Li Du's achievements is the company's rich heritage and solid brand popularity, which made it stand out in the fiercely competitive liquor industry in China.
The three-layer growth engine drives strength and sustainable growth
The company has established a three-tiered growth engine: the flagship brand Jeong Liquor, which mainly focuses on sub-high-end flavored liquor, is its main growth engine. It continues to record strong and impressive growth across China, seizing the high growth potential and high-end trend of the sauce-flavored liquor market. Li Du, a booming brand with a focus on sub-high-end and higher flavored liquor products, has achieved high growth, and is expected to create more momentum for the group to continue to grow by further strengthening its brand popularity outside of Jiangxi Province and its national sales network. Leading regional brands in the Hunan market, Xiangjiao and Gongxiao are expected to continue to contribute to the company's long-term sustainable growth. According to Frost & Sullivan's data, in terms of revenue, among the top 15 liquor companies, Zhenjiu Lidu is the only liquor company that operates three types of high-end liquor brands in China. With their respective growth tiers, the three-tier growth engines complement each other, and jointly drive what the company sees as strong and sustainable long-term growth.
Punda production capacity located in scarce and premium liquor production areas strengthens its core competitiveness and long-term growth potential. All of the company's wine production facilities are strategically located in the Zunyi area of Guizhou, which is why China is widely recognized as an ideal place for brewing high-quality flavored liquor. The company's production of Pondas in the region lays the foundation for stable production of high-quality base wines, and high-quality base wines play a key role in ensuring that Pongda continues to produce high-quality liquors. According to Frost & Sullivan's data, at the end of 2022, according to the annual production capacity of the base wine, Zhenjiu ranked fourth and third among all Chinese and Guizhou flavoured liquor brands. Since high-quality liquor production areas are scarce and require a large amount of capital investment, the Punda production capacity for flavored liquor is the company's core competitive strength, making it difficult for competitors to match.
Risks
Changes in consumer preferences, demand and consumption patterns may have a significant negative impact on the company's business and operating results.
The company's business growth will be determined in part by its brand awareness, and the company's failure to maintain, protect and enhance its brand (including any negative reporting) will limit its ability to retain and expand its customer base, and have a significant adverse impact on its operations, financial position and operating results.
The Chinese market where the company operates is competitive and developing rapidly.
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