Kweichow Moutai Co., Ltd., (SHA:600519) and Wuliangye Yibin Co., Ltd. (SHE:000858) are two of the big players in China’s liquor business. These companies are proving that working hard in China feels a little bit sweeter when you hold a cold alcoholic beverage in your hand after putting in long hours in the business world.
Although the Chinese economy is booming and moving rapidly to become the largest economy in the world, the people of China have not been distracted from the lighter side of life. The country is working hard and developing a taste for a variety of alcoholic beverages. After a hard day’s work, some Chinese like to lay back, relax and enjoy some drinks. These are the companies that are focusing in on the free time of China’s citizens.
Kweichow Moutai Co., Ltd. produces, distributes and sells liquor in China. The company has a diversified portfolio as it is involved in food, drink, as well as other lines of business like anti-counterfeit technology and IT products and services. Aside from producing over 29,000 tons of their Moutai liquor products alone, the company has an established ability to market domestically and overseas. Kweichow Moutai is number 1 in China’s alcohol market and valued at $140.55 billion and their stock is currently trading at $148.92 per share.
Kweichow Moutai has a very strong domestic portfolio with potential to dominate markets outside of China. In a global economy, the company is very well positioned to start acquiring small brewing companies in order to establish a huge variety of liquor products.
Wuliangye Yibin Co., Ltd. Has positioned itself on the Minjiang River, north of Yibin City in Southwest China. The company restructured itself in 1998 and now is a modern corporation that performs many different operations in the Chinese marketplace. Wuliangye Yibin manufactures plastic products, high-end injection and stamping molds of all sizes, is involved in bioengineering, pharmaceuticals, logistics, and many other services and activities. The company boasts 30,000 employees, 400,000 tons of liquor and a capacity to package more. Wuliangye Yibin Co., Ltd. has a market cap of $113.04 billion and their stock is currently valued at $29.78 per share.
Wuliangye Yibin Co., Ltd. has brand loyalty and a good relationship with the community in China. The company believes strongly in social responsibility and taking care of the people in its regions of operations. This can sometimes be overlooked as unnecessary expenses, but when you have 20 different bottles in front of you at the supermarket and one of them reminds you of how they helped your community in a time of need, the decision becomes very easy.
These two behemoths have been around for a while and are not going anywhere anytime soon. The only question that still remains is; how far is their reach into the market? That is a question that can be answered over time, but their goals set them apart. Kweichow Moutai is positioning itself to look at the global market. Wuliangye Yibin Co., Ltd is refining its domestic base and focusing on saturating the market with its products and social responsibility. Whichever way you look at, both companies are playing the game they know best, and to the victor go the spoils.
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