Ning Jia of Shanghai Pumeng Asset Management presented his in-depth investment thesis on Jiangsu Yanghe Brewery (China: 002304) at Asian Investing Summit 2020.

Thesis summary:

Jiangsu Yanghe Brewery is the third-largest baijiu (spirits) company in China. The baijiu industry, especially the premium and super premium segment of the industry, has one of the best business models in the world due to the unique nature of the product and unique characteristics of China’s spirits market.

Jiangsu Yanghe Brewery has relentlessly and carefully built one of the most recognizable premium and super premium baijiu brands since 2003, as well as a best-in-class distribution network. As a result, the company has compounded sales and profits at an annual rate of 19+% since the IPO more than a decade ago. While Yanghe is facing significant short-term challenges due to a variety of factors, management has taken targeted actions to get back to sustainable growth, with promising early signs of improvement.

Based on Ning’s analysis, the recent market quotation of Yanghe offers a sufficient margin of safety and potentially substantial upside for long-term investors.

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About the instructor:

Ning Jia is the Chief Investment Officer of Pumeng Asset Management.

Previously Ning worked for four years as an analyst covering U.S and China consumer, healthcare, financial and TMT sectors at Century Management based in Austin, Texas. Century was founded by Arnold Van Den Berg in 1974 and has more than 40 years of track record as an investment manager.

Ning received his Master of Accountancy and B.B.A in Accounting from the University of Georgia. He is a CFA charterholder and a CPA.