VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Tuesday, December 30, 2025
Shanxi Xinghuacun Fen Wine Factory Co., Ltd.
600809 · Shanghai Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Shanxi Xinghuacun Fen Wine Factory Co., Ltd. (600809) is a China-listed spirits producer best known for Fenjiu (light-aroma baijiu) and also produces Zhuyeqing and the Xinghuacun series. The business is dominated by mid-to-high priced products (>= RMB130/L), which carry substantially higher gross margins than other tiers. The core moat is demand-driven: brand trust and heritage reinforced by participation in setting the national standard for light-aroma baijiu, plus long-developed production know-how. A broad distributor footprint and growing e-commerce channel support nationwide reach, with most sales coming from outside Shanxi. Key risks are intense competition in baijiu, policy pressure on gifting/banquets, and channel inventory or price inversion during industry slowdowns.
Primary segment
Mid-to-High Priced Liquor (>= RMB130/L)
Market structure
Oligopoly
Market share
—
HHI: —
Coverage
2 segments · 6 tags
Updated 2025-12-30
Segments
Mid-to-High Priced Liquor (>= RMB130/L)
China premium baijiu (with focus on light-aroma baijiu) and mid-to-high priced spirits
Revenue
73.7%
Structure
Oligopoly
Pricing
strong
Share
—
Peers
Other Liquor (value-tier baijiu and other spirits)
China mainstream/value baijiu and other spirits/liqueurs
Revenue
25.9%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Moat Claims
Mid-to-High Priced Liquor (>= RMB130/L)
China premium baijiu (with focus on light-aroma baijiu) and mid-to-high priced spirits
Revenue share computed from FY2024 disclosed 'mid-to-high priced liquor' revenue RMB 26.532B divided by total revenue RMB 36.011B (2024 annual report).
Brand Trust
Demand
Brand Trust
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Heritage brand positioning in light-aroma baijiu; company highlights Fenjiu as a representative light-aroma baijiu and notes participation in setting the national standard for light-aroma baijiu - supporting premium willingness-to-pay.
Erosion risks
- Consumer downtrading in weak macro cycles
- Policy tightening on gifting/banquets (anti-corruption)
- Counterfeits or quality incidents damaging reputation
Leading indicators
- Mid-to-high tier revenue growth rate
- Gross margin for mid-to-high tier
- ASP/mix (premium series contribution)
Counterarguments
- Top-end consumers may still prefer Moutai/Wuliangye; brand premium is not unique
- Younger consumers may shift to beer/RTD/low-alcohol options, limiting category growth
Learning Curve Yield
Supply
Learning Curve Yield
Strength: 3/5 · Durability: durable · Confidence: 3/5 · 1 evidence
Distinct fermentation/distillation and blending practices (e.g., cellar fermentation and multi-step process) plus tight process control can improve quality consistency over time and make exact replication difficult at scale.
Erosion risks
- Process imitation by competitors with enough time/capex
- Loss of key technical talent or weaker quality control
- Food safety/contamination events impacting perceived quality
Leading indicators
- Quality incident/recall frequency
- Customer complaint rates and return rates
- Consistency of product reviews/ratings over time
Counterarguments
- Process descriptions are public; replication may be feasible with investment and talent
- Taste preferences can change, reducing the advantage of a specific style/process
Distribution Control
Supply
Distribution Control
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 2 evidence
A large, multi-channel route-to-market (regional/county distributors plus specialty stores, direct sales, and e-commerce) supports nationwide penetration - especially outside Shanxi - and helps maintain shelf presence and execution.
Erosion risks
- Channel inventory build-up causing discounting/price inversion
- Online disintermediation and channel conflict
- Distributor consolidation increasing bargaining power
Leading indicators
- Distributor counts and churn
- E-commerce revenue growth and promo intensity
- Receivables and contract liabilities trends
Counterarguments
- Competitors can replicate distribution with incentives; distributors often multi-home
- Strong distribution does not prevent consumers from switching brands in premium categories
Preferential Input Access
Supply
Preferential Input Access
Strength: 2/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Large contracted grain planting base helps secure consistent raw material supply (sorghum, barley, peas) for production scale and quality control, reducing supply risk versus purely spot sourcing.
Erosion risks
- Weather/climate shocks impacting yields
- Commodity cost inflation and competition for grain supply
- Quality variance across farming regions
Leading indicators
- Raw material cost per unit and margin sensitivity
- Reported supply disruptions or procurement tightness
- Quality metrics for incoming grain batches
Counterarguments
- Grain inputs are largely commoditized; other large distillers can secure similar supply contracts
- Input control supports cost/quality, but does not guarantee consumer preference
Other Liquor (value-tier baijiu and other spirits)
China mainstream/value baijiu and other spirits/liqueurs
Revenue share computed from FY2024 disclosed 'other liquor' revenue RMB 9.342B divided by total revenue RMB 36.011B (2024 annual report).
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 2 evidence
Large production/sales scale and ongoing investments in base spirit capacity and storage can lower per-unit costs and support stable supply across broader price tiers.
Erosion risks
- Industry oversupply leading to price wars in value tiers
- Rising input and packaging costs compressing margins
- Lower-end substitution (beer/RTD/other spirits)
Leading indicators
- Utilization rates and inventory levels
- Unit cost trends (packaging and grain costs)
- Gross margin for 'other liquor' tier
Counterarguments
- Scale advantages are shared with other large distillers; not exclusive
- In value tiers, consumer switching costs are low and promotions can erase cost advantages
Distribution Control
Supply
Distribution Control
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Broad distributor footprint and multiple channel formats help push volume in mainstream tiers; execution and shelf presence matter more than product differentiation in commoditized subsegments.
Erosion risks
- Distributor incentives shift toward rival brands
- Online price transparency increasing discounting pressure
- Retail consolidation raising slotting fees
Leading indicators
- Distributor count and performance metrics
- E-commerce share of sales and promo intensity
- Regional sales growth outside Shanxi
Counterarguments
- Distribution is contestable; competitors can win shelf space with higher rebates
- Low-end categories are more price-driven, reducing the benefit of brand-owned distribution
Evidence
The company is one of the drafters of the national standard for light-aroma baijiu, and its main product Fenjiu is a representative light-aroma baijiu in China.
Translated from Chinese to support a trust/heritage framing and technical authority in the category.
Mid-to-high priced liquor refers to products >= RMB 130 per liter; gross margin 84.45%.
High gross margin in the premium tier is consistent with strong pricing power supported by brand equity.
The company follows Fenjiu's distinctive cellar fermentation and double steam distillation process.
Translated from Chinese; provides explicit description of a differentiated process underpinning product quality and consistency.
The company uses a manufacturer-led, manufacturer-distributor co-built marketing model, supplemented by direct sales, e-commerce, and new retail.
Translated from Chinese; describes the channel structure and the company-led model.
Out-of-province distributors: 3,718; e-commerce sales revenue RMB 210,501.94 (ten-thousand RMB).
Translated from Chinese; quantifies channel reach (distributor count) and e-commerce scale, supporting distribution breadth.
Showing 5 of 9 sources.
Risks & Indicators
Erosion risks
- Consumer downtrading in weak macro cycles
- Policy tightening on gifting/banquets (anti-corruption)
- Counterfeits or quality incidents damaging reputation
- Intensifying competition from other national baijiu brands
- Process imitation by competitors with enough time/capex
- Loss of key technical talent or weaker quality control
Leading indicators
- Mid-to-high tier revenue growth rate
- Gross margin for mid-to-high tier
- ASP/mix (premium series contribution)
- Channel inventory signals (contract liabilities, price inversion reports)
- Quality incident/recall frequency
- Customer complaint rates and return rates
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.