Morningstar

ZJLD Group Inc 06979

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Stock XHKG Rating as of
HK$9.51 +0.51 (5.67%)
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As of Delayed Price Closed

Company Report

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

Jennifer Song

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.

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Price vs Fair Value

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06979 is trading at a 176% premium.
Price
HK$9.51
Fair Value
HK$81.30
Uncertainty
High
1-Star Price
HK$56.35
5-Star Price
HK$5.92
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

ZJLD should benefit from the baijiu premiumization trend in China, leading to stronger sales of higher-end products and wider profit margins.

Bears

Economic slowdown and rising supply of Jiang-flavor baijiu pressure Zhen Jiu’s sales and affects ZJLD’s earnings.

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Trading Information

Previous Close Price
HK$9.00
Day Range
HK$9.01–9.60
52-Week Range
HK$5.56–13.10
Bid/Ask
HK$9.51 / HK$9.58
Market Cap
HK$32.23 Bil
Volume/Avg
7.9 Mil / 8.8 Mil

Key Statistics

Price/Earnings (Normalized)
15.67
Price/Sales
3.77
Dividend Yield (Trailing)
1.89%
Dividend Yield (Forward)
1.89%
Total Yield
1.89%

Company Profile

Zhenjiu Lidu, or ZJLD, is one of the leading non-state-owned baijiu distillers in China. It operates a portfolio of baijiu brands with aroma ranging across Jiang, Rich, and Mixed flavors that include Zhen Jiu, Li Du, Xiang Jiao, and Kai Kou Xiao, which contributed 65%, 16%, 12% and 6% of total revenue in 2023, respectively. ZJLD listed on the Hong Kong Stock Exchange in April 2023, ranking it as the ninth largest among the listed baijiu distillers in terms of revenue in 2023. Chairman Wu Xiangdong through Jindong Investment, controls 69% of the firm’s total equity stake as of December 2023.
Sector
Consumer Defensive
Industry
Beverages - Wineries & Distilleries
Stock Style Box
Mid Growth
Total Number of Employees
10,956
Website
https://www.zjld.com

Competitors

Valuation

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Metric
06979
000568
000799
Price/Earnings (Normalized)
 15.6715.2754.70
Price/Book Value
 2.275.274.12
Price/Sales
 3.776.757.36
Price/Cash Flow
 40.3514.5254.36
Price/Earnings
06979
000568
000799

Financial Strength

Metric
06979
000568
000799
Quick Ratio
 1.372.351.52
Current Ratio
 2.723.092.62
Interest Coverage
 389.3738.201,548.54
Quick Ratio
06979
000568
000799

Profitability

Metric
06979
000568
000799
Return on Assets (Normalized)
 10.64%21.69%4.12%
Return on Equity (Normalized)
 14.57%35.77%5.72%
Return on Invested Capital (Normalized)
 13.55%26.67%4.13%
Return on Assets
06979
000568
000799

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