Luzhou Laojiao: A Resilient Juggernaut in an Industry‑Wide Downturn
The Chinese spirits titan Luzhou Laojiao (000568) has once again proven that it can thrive even as the broader white‑wine sector slides into contraction. On 30 October, the company released its nine‑month earnings, showing revenue of 23.127 billion CNY and a net profit of 10.762 billion CNY, the first time the firm has eclipsed the 10 billion CNY mark in a single quarter.
- Revenue momentum – 23.127 billion CNY, a 12 % rise year‑on‑year, and an almost 20 % rise on a nine‑month comparison.
- Profitability – Net profit of 10.762 billion CNY, up 8 % year‑on‑year, with an earnings‑per‑share ratio that comfortably sits above the industry median.
These figures confirm that Luzhou Laojiao’s “high‑end, three‑dimensional innovation” strategy is working. The firm’s focus on low‑strength, youthful, and scenario‑driven products has begun to pay off, turning a period of sector‑wide contraction into a window of sustainable growth.
Analyst Sentiment: A Unified Chorus of Optimism
On 31 October, five research houses released updated ratings for Luzhou Laojiao, all of them bullish.
| Research House | Rating | Target Price | Forecast 2025 Net Profit |
|---|---|---|---|
| Huachuang Securities | Strong Buy | ≤ 180 CNY | 114.25 billion CNY |
| Fangzheng Securities | Recommendation | – | 123.92 billion CNY |
| Guojin Securities | Buy | – | 121.90 billion CNY |
| Zhaomeng Securities | Strong Recommendation | – | 113.84 billion CNY |
| Other | – | – | – |
All four forecasts place the 2025 net‑profit figure between 113.8 and 123.9 billion CNY, a level that would lift the company’s earnings‑per‑share ratio well above the current 15.1 P/E multiple, underscoring a valuation upside even before the end of the fiscal year.
Market Response: A Rally in the White‑Wine Sector
The broader beverages market moved cautiously on 31 October. The Shanghai Composite fell 0.81 %, yet the food‑and‑drink sector posted a modest 0.81 % gain. Luzhou Laojiao’s shares surged 3.59 %, outpacing peers such as Guizhou Maotai (0.23 %) and Wuliangye (0.44 %). This outperformance highlights investor confidence in Luzhou Laojiao’s premium‑brand moat and its ability to maintain pricing power even under inventory pressure.
The firm’s 134.54 CNY closing price, a 2.5 % rise from the day before, sits comfortably below the 52‑week high of 156 CNY, giving the stock room to breathe while still rewarding short‑term momentum traders.
Strategic Initiatives: From E‑Commerce to Rural Penetration
Luzhou Laojiao is not resting on its laurels. The company is actively deploying a multi‑channel strategy that leverages its presence on leading e‑commerce platforms for major sales events such as Double 11. Moreover, the firm is exploring collaborations with top influencers to deepen its reach into rural markets—a demographic that has historically lagged in premium‑wine consumption but is increasingly receptive to high‑quality products.
These efforts are designed to counterbalance the sector’s “volume‑down, quality‑up” trend, ensuring that the company can capture market share from lower‑priced competitors while sustaining its premium positioning.
The Bottom Line: A Robust Growth Engine Amidst a Wobbly Landscape
While the white‑wine industry grapples with inventory glut and shifting consumer preferences, Luzhou Laojiao’s recent performance underscores a robust, adaptable business model. The company’s clear strategic focus on high‑end, diversified product innovation, combined with aggressive channel expansion and a bullish analyst outlook, positions it to not only survive but to dominate in the years ahead.
Investors who have held onto the stock through recent volatility are now rewarded with a solid earnings trajectory, a favorable valuation relative to peers, and a forward‑looking growth strategy that taps into the evolving consumption landscape.
