Top China Stock Fund Manager Sees Fiery Spirit as Toast of TownBy
Baijiu distillers trade at a discount to global liquor peers
- Distillers have higher free cash flow vs Chinese brewers
The grain liquor that is China’s national spirit is known for its potency. To investors, the companies that distill the alcohol known as baijiu also pack quite the punch.
E Fund Management Co.’s Xiao Nan, a top fund manager in China, describes the sector’s business model as “stand still and collect money.” His E Fund Consumption Industry Equity Fund has returned 52 percent over three years through May 4, the best performance among 161 A-share funds with at least three years of history and more than 1 billion yuan ($159 million) of assets, according to data compiled by Bloomberg. About a third of his portfolio are baijiu stocks like Kweichow Moutai Co. and Wuliangye Yibin Co., which have both been on bull runs over the last three years…
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