Dukang Distillers

Dukang Distillers registered net profit of Rmb70.5m (-52%) and revenue at Rmb389.4m (-4%). The Group’s overall sales was marginally down due mainly to the decrease in revenue from Siwu’s operations. Despite a 12% increase in average selling price (ASP) to Rmb26.4 per KG, Siwu’s revenue declined 25% to Rmb79.1m on the back of a 33% y/y drop in sales volume to 2,994 tons. Revenue of Luoyang Dukang’s premium series declined, although this was supported by growth of its regular series sales. Going forward, Dukang notes that the impact of the curb on Chinese government public spending on first-tier baijiu brands has now rippled through the baijiu industry and is felt by the second-tier brands and the rest. China’s baijiu industry has entered a period of adjustment whereby development of premium baijiu segment will be stifled