| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 31.92 | 98 |
| Intrinsic value (DCF) | 9.93 | -38 |
| Graham-Dodd Method | 2.71 | -83 |
| Graham Formula | 8.64 | -46 |
Hebei Hengshui Laobaigan Liquor Co., Ltd. is a prominent Chinese baijiu producer founded in 1946 and headquartered in Hengshui, China. The company specializes in the production and distribution of traditional Chinese white spirits under renowned brands including Hengshui Laobaigan, Chengde Qianlong Drunk, Wenwangong, Wuling, and Confucian Family Wine series. Operating in the Consumer Defensive sector's Beverages - Wineries & Distilleries industry, Hengshui Laobaigan has established itself as a significant player in China's massive baijiu market, which represents one of the world's largest spirits categories by volume. The company leverages its historical heritage and regional expertise to cater to domestic consumers who value traditional brewing techniques and cultural authenticity. With its Shanghai Stock Exchange listing, the company maintains transparency while serving the growing demand for premium and mid-tier baijiu products across China's diverse consumer markets.
Hebei Hengshui Laobaigan presents a mixed investment profile within China's competitive baijiu market. The company demonstrates reasonable financial health with a market capitalization of approximately CNY 16.1 billion, revenue of CNY 5.36 billion, and net income of CNY 787 million, translating to a diluted EPS of 0.86. The company maintains a solid liquidity position with CNY 1.55 billion in cash against modest debt of CNY 149 million, while offering an attractive dividend yield with a payout of CNY 0.55 per share. However, investors should note the relatively high beta of 1.261, indicating above-average volatility compared to the market. The baijiu sector faces increasing competition and changing consumer preferences, though Hengshui Laobaigan's established brand portfolio and regional presence provide some defensive characteristics. The modest operating cash flow of CNY 535 million relative to revenue suggests potential efficiency concerns that warrant monitoring.
Hengshui Laobaigan operates in the highly competitive Chinese baijiu market, where it holds a regional stronghold in Hebei province but faces intense competition from both national giants and local specialists. The company's competitive advantage stems from its historical brand heritage dating back to 1946 and its diverse portfolio catering to different consumer segments and price points. Its flagship Hengshui Laobaigan brand benefits from regional recognition and traditional brewing techniques that appeal to consumers valuing authenticity. However, the company lacks the national scale and premium positioning of industry leaders like Kweichow Moutai and Wuliangye, which dominate the high-margin premium segment. Hengshui Laobaigan's middle-market positioning exposes it to intense competition from numerous regional players while lacking the pricing power of luxury brands. The company's distribution network is primarily concentrated in northern China, limiting its national reach compared to larger competitors with extensive nationwide presence. While its product diversification across multiple brand series provides some resilience, the company faces challenges in scaling beyond its regional base and competing effectively in the rapidly evolving premiumization trend within China's alcohol market.