These two Chinese baijiu makers are poised for growth, says HSBC

The outlook remains robust for high-end Chinese liquor makers despite slowing growth in food spending and stronger competition from foreign brands, according to a research report.

With other local food vendors facing headwinds, the top two baijiu makers can maintain their high profitability because of strong brand awareness, according to analysts at HSBC.

After decades of heady growth, food spending in China has reached a high level with limited room for further expansion.

The per capita consumption for many food and beverage products is now close to that of Japan and South Korea as consumers become more affluent, said HSBC analysts led by Christopher Leung.

Meantime, domestic food vendors are finding it more difficult to cater to the changing tastes of the Chinese middle class, especially with the competition from foreign brands.

However, baijiu, the expensive Chinese white spirit, is a different story.