Dukang

Dukang: Raked in another set of very strong 4Q13 results, with net profit coming in at Rmb79.2m (+221%) and revenue at Rmb622.9m (+37% y/y) The result brings FY13 net profit to Rmb 389.7m (+79%). The improvement in sales was achieved on the back of higher sales volume and rising average selling price for products under the Dukang brand, in particular ‘Luoyang Dukang’ which saw sales volume rising 125% to 33,910 tons for FY13. The improvement in sales was achieved on the back of higher sales volume and rising average selling price (ASP) for products under the Dukang brand. Sales volume of Luoyang Dukang rose 125% y/y to 33,910 tons for FY2013, leveraging on a successful brand building and penetration into the high-end baijiu market, while the ASP for Luoyang Dukang improved 9.0% y/y to RMB55.7 per kg for FY13. As a result, sales of products under the “Dukang” brand, which accounted for 78.4% of the overall sales for FY2013 versus 61.4% for FY2012, increased 68.2% yoy to RMB1,887.1 million from RMB1,121.9 million a year ago. Going forward, the grp note that despite the stellar growth recorded by the Group, China’s baijiu industry has entered a period of adjustment, the curb on the Chinese government public spending will inevitably restrict the development of high-end baijiu segment.