Beauty, Luxury and Health - all in one stockIn a country where drinking spirits like Moutai and beer is common, wine consumption is registering strong growth , especially amongst the Tier 1 cities of China (Beijing, Shanghai and Guangzhou).
Unlike the western countries, drinking wine in China is more for beauty rather than a social norm. And women, not the men are the main target market. In other parts of China, like the rural areas, few or nobody consume wine , favoring over their local beer or spirits.
As the middle income group grow in China, they are also becoming more health conscious. In festive season like the Chinese New Year, more families especially the younger, educated who probably had studied a few years abroad like Australia, US or Europe would introduce the habit of drinking wine to the family and friends.
Like many luxury products, the more exquisite is the packaging , the more they like. Because of the lack of knowledge in this wine segment, words of mouth recommendation becomes an important source of purchase. And sadly, local winery tends to lose out to the imported ones from Australia, France and Spain.
Chart wise, we see that the price action has broken out of the long term bearish trend since 2011. So long the price stays above 30 dollars, I think the chances of it returning to the bullish trend is quite high.
At current price, I think it is quite a steal to get into this company with increasing revenue, low debts and huge potential ! DYODD
