| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 184.11 | 39 |
| Intrinsic value (DCF) | 138.70 | 5 |
| Graham-Dodd Method | 29.88 | -77 |
| Graham Formula | 248.65 | 88 |
Anhui Gujing Distillery Co., Ltd. is a prominent Chinese baijiu producer and marketer headquartered in Bozhou, Anhui Province. As a leading player in China's traditional spirits industry, Gujing Distillery specializes in producing and distributing various types of baijiu, a clear, potent Chinese liquor that dominates the domestic alcoholic beverage market. The company operates across multiple business segments including liquor production, trading, waste recycling, machinery production, advertising, hotel management, e-commerce, and research activities. Founded in 1996 and controlled by Anhui Gujing Group, the company has established itself as one of China's most recognized baijiu brands with significant market presence both domestically and internationally. In the consumer defensive sector, Gujing Distillery benefits from stable demand patterns characteristic of alcoholic beverages, particularly in China where baijiu holds cultural significance in business and social gatherings. The company's diversified operations beyond core distilling activities provide additional revenue streams while supporting its primary business through integrated services like advertising and e-commerce.
Anhui Gujing Distillery presents an attractive investment profile within China's defensive consumer staples sector, characterized by strong profitability metrics including a net income of CNY 5.52 billion on revenue of CNY 23.58 billion, translating to a healthy net margin of approximately 23.4%. The company demonstrates robust financial health with substantial cash reserves of CNY 15.89 billion against minimal total debt of CNY 176 million, providing significant financial flexibility. With a diluted EPS of 10.44 and a generous dividend per share of 6.0 CNY, the company offers compelling shareholder returns. The low beta of 0.604 suggests relative stability compared to broader market volatility, though investors should monitor potential regulatory changes affecting China's alcohol industry and evolving consumer preferences. Strong operating cash flow of CNY 4.73 billion supports continued investment in growth initiatives while maintaining dividend sustainability.
Anhui Gujing Distillery occupies a strong position within China's highly competitive baijiu market, leveraging its regional heritage and brand recognition to maintain market share. The company's competitive advantage stems from its geographical positioning in Anhui Province, which provides access to traditional production methods and local consumer loyalty. Unlike premium national brands that command higher price points, Gujing operates effectively in the mid-to-high market segment, balancing quality with accessibility. The company's extensive distribution network across China and international markets provides reach beyond its regional base, while diversified operations in related businesses create synergies that support the core distilling operations. However, Gujing faces intense competition from both ultra-premium national brands and numerous regional producers, requiring continuous brand investment and product innovation. The company's relatively smaller scale compared to industry giants limits its marketing budget and national footprint, but this is partially offset by stronger regional dominance and potentially more efficient operations. Gujing's financial strength enables strategic investments in production capacity, marketing, and channel development to compete effectively against both larger national players and emerging craft producers. The evolving regulatory environment and changing consumer preferences, particularly among younger demographics, present both challenges and opportunities for market positioning.