3 Risks in Liquor Makers

Despite a 30% share price retreat, we still view these companies as overvalued.

Kate Lin, CAIA 30 August, 2021 | 10:10
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Investors in China equities are sensitive to news that suggests that China’s regulatory crackdown is far from over. The most recent focused on the Chinese makers of white liquor, commonly known as baijiu. Leading names like Kweichow Moutai (600519) and Wuliangye Yibin (000858) have come under pressure.

The trigger was the State Administration for Market Regulation meeting major baijiu companies for a panel discussion. Earlier this month, the Ministry of Science and Technology of the PRC released an article naming heavy consumption of alcohol as the reason for cancer. Investors began to dump shares, fearing that the regulator that oversees market behaviors and product safety may go after the industry.

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About Author

Kate Lin, CAIA

Kate Lin, CAIA  is a Data Journalist for Morningstar Asia, and is based in Hong Kong

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