Dukang Distillers Holdings

[Wildreamz]

This is what I gleaned from Dukang's AGM held on 28 Oct 2013:

1) Sales & Earnings Have Peaked
Management has stated that they'd be shifting the product mix from premium baijiu to mid-tier and low-end baijiu due to a slowdown in the premium baijiu market. Management has indicated that sales and margins for the next few quarters would be lower as a result of the change in product mix.

2) Grim Industry Outlook
The baijiu industry is seeing a slowdown in premium baijiu sales, resulting in heightened competition among baijiu producers and lower selling prices. The chairman in the AR has stated that, "We need to preserve enough cash to tide us through the trying times ahead. "

3) Huge Cash Horde of RMB758 million Is Illusory
Management has indicated that Dukang needs about RMB500 million in cash to support working capital needs. Hence excess cash on the balance sheet(cash on the balance sheet that is not utilised in the normal course of business) only amounts to RMB258 million. Given that Dukang is facing an industry down turn, it is unlikely that it would be tapping on the RMB258 million to pay out a dividend.

As usual, I'd be giving out stock tips to those who choose to PM me.

Hi, thanks for sharing.

Can you shed some light on when will the increased capacity kick in?

Because from the recent report, the output seems the same.