New Morningstar Analyst Report for Shanxi Xinghuacun Fen Wine Factory Co., Ltd.

Shanxi Fen Wine is a typical light-flavored spirit in China and has a different aroma and taste compared to sauce-flavored and rich-flavored spirits. Fen Wine lags behind sauce-flavored spirit maker Moutai and rich-flavored spirit maker Wuliangye in terms of both pricing power and market share. Revenue and profit growth accelerated in 2009 and 2010, which we attribute to a series of strategic changes in branding, products, and distribution in 2008. We believe the firm can translate its recent investments in branding and distribution into a stronger brand and a higher market share, and we expect to see continuing improvements in its business fundamentals in the coming years.