The latest: Traditional spirits producer ZJLD Group Inc. (6979.HK) announced On Wednesday, non-GAAP adjusted net profit for the first half of this year rose 26.9 percent to 1.02 billion yuan ($143 million).

Look up: The company’s revenue rose 17.5% to 4.13 billion yuan, mainly due to strong sales of its two major brands, Zhen Jiu and Li Du, which grew 17.2% and 37.9% respectively. Gross margin also increased by 0.9 percentage points year-on-year, mainly due to a higher sales contribution from its higher-priced products.

Please note: The company’s net profit decreased 52.6% to 752 million yuan, mainly due to changes in the fair value of financial instruments issued to an investor that were one-time and not paid in cash recorded last year, as well as equity-settled share-based compensation expenses to be incurred in 2024.

Dig deeper: ZJLD’s roots go back to 2003, when Wu Xiangdong, the majority owner with a stake of over 81 percent before the IPO, first acquired the Xiang Jiao and Kai Kou Xiao liquor brands from Hunan province. Six years later, the Zhen Jiu brands from Guizhou province and the Li Du brands from Jiangxi province were added as the company expanded and focused on the high-end liquor market. In April last year, the company went public in Hong Kong, raising HK$5.3 billion (US$680 million), making it the biggest IPO of the year in the city.

Market reaction: ZJLD shares fell on Thursday, closing 3% lower at HK$7.18 by lunchtime. The stock is now trading 33.6% lower than last year’s IPO price of HK$10.82.

Translation by A. Au

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