Shanxi Fenjiu Investment Quality Review (600809.SH)

Data timestamp: 2026-08-03 22:13 UTC
Quality score: 79/100
Valuation position: current price/base FV 1.52
Final signal: WATCHLIST

Core Conclusion

Shanxi Fenjiu stays on the watchlist but is not cheap. Current price of CNY123.75 is 1.52x base FV of CNY81.47 and 1.67x conservative FV of CNY73.91. The franchise has quality, but the valuation offers no 2x asymmetry.

Business Breakdown

Five-year revenue CAGR is 1.1%, with latest-year revenue of CNY38.72bn. Brand strength and regional expansion support the case, while liquor-cycle risk and weaker growth keep valuation conservative.

Business Quality

The 79/100 score is supported by high ROE, high ROIC, and net cash. Latest-year FCF was CNY7.82bn. Five-year average ROE was 33.5% and average ROIC was 32.3%. Cash conversion is acceptable but not enough for a buy at this price.

Financial Audit

Fiscal 2025 revenue was CNY38.72bn, net profit CNY12.25bn, operating cash flow CNY9.01bn, capex CNY1.19bn, and FCF CNY7.82bn. Five-year FCF/net income was 0.89 and OCF/net income was 0.96. Latest net cash was CNY9.57bn.

Valuation

The conservative case uses CNY8.61bn normalized FCF, 0.1% growth, and 8.0x, producing CNY73.91 per share. The base case uses 1.1% growth and 9.1x, producing CNY81.47. The optimistic case uses 2.6% growth and 12.7x, producing CNY107.29. Current price is above all cases.

Buy And Tracking Discipline

The action is watch. A buy requires price/base FV below 0.70, quality above 75, stable cash conversion, and evidence that premiumization, channel inventory, and pricing remain healthy.

Risk Review

Risks include baijiu demand normalization, channel inventory, discounting, regional competition, working-capital pressure, and governance or capital allocation changes. Weak FCF or net cash erosion would lower FV.

Data Sources

The memo relies on public market and financial data, company filings or investor-relations materials, ChinaBond yield data, and public FX data where applicable. This is research only, not personalized investment advice.