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          BIZCHINA> Top Biz News
          Guyuelongshan FY sales decline 8.23%
          By Ding Qingfen (China Daily)
          Updated: 2009-03-20 07:54

          Guyuelongshan, China's largest rice wine maker, yesterday said full year profit rose 4.45 percent from a year earlier to 122.77 million yuan, thanks to price increases and cost cutting efforts.

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          Guyuelongshan FY sales decline 8.23% Counting on naturally fine wines
          Guyuelongshan FY sales decline 8.23% For local wines, these are the best of the bunch

          Sales for 2008 fell 8.23 percent to 747.81 million yuan as a result of the spin-off of the non-core spandex business, which registered a turnover of 179.38 million yuan in 2007. Rice wine sales slowed in the second half of 2008 as corporate customers began to cut down on entertainment and other expenditure due to the global financial crisis.

          Guyuelongshan said it still managed to make a moderate profit due to price increases and initiatives taken to cut costs.

          Though the company introduced a cost-cutting program, it is still handicapped by its over concentration on the mid- to low-end sections of the market.

          Shanghai Jinfeng, the second largest rice wine maker, posted a profit of 208 million yuan for 2008 on sales of 4.65 billion yuan, although its sales volume, at 105,000 kiloliters, was smaller than Guyuelongshan's 240,000 kiloliters. The profitability, or return on sales, at Guyuelongshan in 2008 was 41 percent compared to the 47.7 percent at Jinfeng.

          "Guyuelongshan targets the low and mid-end consumers, but for Jinfeng, the targeted consumers are more up-market," said Teng Wenfei, beverage analyst, Shanghai Securities.

          Guyuelongshan, however, said it expects wine sales this year to grow by 11 percent to 800 million yuan.

           


          (For more biz stories, please visit Industries)

           

           

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