Consumer Staples Author：Yue Liu Editor：Luke Sheehan Oct 29, 2020 11:45 AM (GMT+8)

Driven by a dazzling transcript, traditional Chinese alcohol maker Luzhou Laojiao's share price rose 10%.

Image credit: EqualOcean

In the third quarter of 2020, Luzhou Laojiao realized revenue of CNY 3.97 billion, a year-on-year increase of 14.45%; net profit attributable to listed companies' shareholders was approximately CNY 1.60 billion, a year-on-year increase of 53%. In the first three quarters of 2020, the company achieved an operating income of CNY 12 billion, an increase of 1% year-on-year; net profit was CNY 4.82 billion, increasing by 27% year-on-year.

During and after the epidemic, high-end liquor showed great resilience. In the first half of 2020, mid-end liquor and low-end liquor revenues all experienced double-digit declines, dropping by 14.04% and 34.37%, respectively. However, the high-end liquor business income increased by 10.03% year-on-year, lifting net profit through high gross profit.

Since 2015, the core driving force of Luzhou Laojiao's growth has come from the high-end liquor 'Guojiao 1573.' The leader, Moutai, has always been in short supply due to its production capacity. As a result, demand flowed to other liquor companies positioned in the high-end sector, bringing growth potential for Guojiao 1573.