Date of Report

October 1, 2024

Broker Name

CGS International Securities

Company Overview

Wuliangye is a leading company in the consumer staples sector, primarily recognized for its production of high-quality Chinese liquor, particularly Baijiu.

Current Market Position

• Current Market Capitalization: Rmb 90.0 billion
• Current Price: Rmb 156.0
• Target Price: Rmb 162.5

Analyst Recommendation

• Recommendation: Add
• Expected Return: The stock’s total return is anticipated to exceed 10% over the next 12 months.

Financial Projections

• Forward P/E (2024): 18.6
• Forward P/E (2025): 16.8

Strategic Outlook

The report highlights that Wuliangye is well-positioned to benefit from recent policy initiatives aimed at boosting consumer spending in China. As the government promotes increased domestic consumption, Wuliangye’s strong brand and established market presence in the spirits sector are expected to drive growth.

Risks and Considerations

While the outlook for Wuliangye is positive, investors should be aware of potential risks such as regulatory changes affecting the alcohol industry, shifts in consumer preferences, and overall economic conditions that may impact spending on luxury goods.

Summary

Wuliangye is showcased as a strong investment opportunity within the consumer staples sector, backed by favorable government policies and its reputation for quality products. The anticipated increase in consumer spending presents a compelling growth trajectory for Wuliangye, making it an attractive option for investors.