Wuliangye Earnings: Steady Growth Continues With Solid Demand Outlook

Wide-moat Wuliangye’s solid second-quarter results reaffirmed resilient demand for premium baijiu, despite weak macroenvironments and still-sluggish consumer sentiment. The 10.1% year-over-year revenue growth and 11.5% rise in net profit were largely consistent with its first-quarter performance, and in line with our expectations. In addition, cash flows remain robust, with cash received from product sales in the first half rising 15.3% from a year ago and advanced payment as of end-June increasing sharply to CNY 8.2 billion, up from CNY 3.1 billion from a quarter ago, indicating solid earnings quality.