Reck wrote: A good positive is that Dukang collects cash on delivery for its Dukang baijiu. It helps to explain why the cash pile in Dukang is so high. But it's hard to understand why no dividend has been paid out!
Where did u get the information that Dukang collect cash on delivery? As far as I know, the bajiu industry is experiencing over-capacity, increasing receivables and declining profits. I would be very impressed if Dukang is able to sell on cash on delivery.
See the response to the question Q: How much inventory is held by distributors?
One way we manage inventory levels is to sell only on cash terms for Dukang brand of products. As they have to pay cash upfront, distributors only place orders with us when there is genuine demand in the market.
pg 1 of OSK report says: "Distributors pay for products upfront in cash hence receivables are low. The receivables on the balance sheet are attributed to sales of Siwu, a weaker brand."
UOB KH report pg 13 says: Dukang products are sold based on cash terms with payments made two weeks before actual delivery. For Siwu products, customers pay a 30% down payment and the remainder 60 days after delivery.
Thanks Reck. Duakng is impressive against the industry backdrop of declining sales and increasing receivables. But having worked in China for more than 10 years, I always take any deviation from market practice with a pinch of salt.