Morgan Stanley released a research report stating that it has initiated a “shareholding” rating for baijiu company Zhenjiu Lidu (06979) with a target price of HKD 9, which is one of the preferred options for the company in the industry. Compared with its peers, the company can still maintain demand when faced with the pressure of destocking in the industry.
In the long run, the bank expects Zhenjiu Lidu to seize market share with a diversified brand portfolio and a well-executed expansion plan. Daiwa predicts that Zhenjiu Lidu's annual compound growth rate of profits from 2023 to 2025 will be 18%, mainly driven by geographical and channel expansion, as well as improved profit margin conditions through sales leverage.