Investment Analysis of Wine Industry Based on Indicators: Evidence from MOUTAI, WULIANGYE and LUZHOU LAOJIAO

Abstract

The wine industry of China has entered the fourth cycle, which means it enters the fourth round of boom with the rise of mass consumption. At the same time, the industry brand and high-end become the trend. Contemporarily, the revenue growth of wine industry has basically stagnated after rapid growth, but high-end liquor still shows vigorous growth. Focusing on the data of Kweichow Moutai, Wuliangye and Luzhou Laojiao, this paper analyzes and evaluates the risk indexes of the three high-end wine brands through liquidity, profitability, and beta. In addition, the investment suggestions are proposed in terms of the evaluations. According to the analysis, it is concluded that Moutai's financial risk, liquidity risk and operational risk are the lowest, but the other two companies still have high investment value. Moutai is suitable for stable investors and balanced investors, Luzhou Laojiao is appropriate for short-term investors due to the remarkable growth rate in recent years, and Wuliangye will be favorable for long-term investors due to the high potential. This study analyzes high-end wine brands and these results shed light on finding investment targets suitable for their risk appetite.