Initiating Coverage on Zhenjiu Lidu, a Multibrand Baijiu Distiller With a Narrow Moat Rating

Zhenjiu Lidu, or ZJLD, has differentiated itself from other China baijiu distillers by operating three distilleries under four different brands, with aromas ranging across Jiang, Rich, and Mixed flavors. It acquired the distilleries of Xiang Jiao, Li Du, and Zhen Jiu during 2003-08. Through heavy investment, ZJLD successfully built Zhen Jiu, Li Du, Xiang Jiao, and Kai Kou Xiao into leading national and regional brands, providing the group with pricing power. Expanding distribution penetration and continuing investment in marketing and branding, have also fortressed its competitiveness.