ZJLD Group (HKG: 6979): IPO of the First Baijiu Maker to List Outside of China Flops

In late April, baijiu liquor maker ZJLD Group (HKG: 6979was the biggest Hong Kong IPO of the year (and the first baijiu to list outside of China) and it flopped:

[Also see: Kweichow Moutai (SHA: 600519): China’s Communist Spirit and Most Valuable Company]

With an alcohol content of as high as 60% by volume, baijiu (distilled from fermented sorghum) is China’s most popular liquor and accounts for third of global alcohol sales:


  • ZJLD has six plants, with three in Southwest Guizhou province’s Zunyi town, where Kweichow Moutai (SHA: 600519is located. Wu Xiangdong, 54, who founded the company in 2003, now controls 81% of the company through Zhenjiu Holding.
  • Brands
Zhen Jiu
Li Du
Xiang Jiao and Kai Kou Xiao
  • Baijiu distiller eyes up to US$811 million in biggest Hong Kong IPO of year (SCMP) April 2023
    • ZJLD Group on Monday started selling up to 490.7 million shares at a price range of HK$10.78 to HK$12.98
    • The IPO prices ZJLD at a higher price-earning multiple than bigger onshore-listed rival distillers
    • At the top of the range, the pricing would give ZJLD a market value of HK$42 billion, or roughly 2 per cent that of China’s biggest liquor producer Kweichow Moutai. The offering would also let global investors access China’s lucrative baijiu market at a price-earnings multiple of 47, compared with 35 to 27 times for onshore-listed market leaders Kweichow Moutai and Wuliangye Yibin Co., Ltd. (SHE: 000858), which are available to offshore investors via the Stock Connect scheme.
    • Net income dropped 8.8 per cent from a year ago to 712.2 million yuan in 2022, while revenue rose 17 per cent to 4.2 billion yuan
  • Chinese liquor: ZJLD is no match for Kweichow Moutai (FT) May 2023
    • China’s second most valuable listed company, Kweichow Moutai (SHA: 600519at $315bn, is no tech stock. It is a hot stock nonetheless. This leading maker of baijiu — a local liquor known as China’s firewater — has proven one of the most lucrative businesses and local investments in the past decade.
    • KKR-backed ZJLD had high hopes because it was the first Chinese baijiu maker to list outside the mainland markets.
    • Unfortunately, the drink’s popularity did not translate into investor demand for ZJLD, which raised $675mn. Shares fell 17 per cent at the open, even after the stock priced its initial public offering at the bottom of the price range amid weak demand for new share sales. The listing values the company at about $4bn, at a steep 27 times earnings.
  • Chinese Baijiu brand ZJLD shares slump 18% on HK market debut, will that dash investors confidence? (Youtube) 2:59 Minutes




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