Yantai Changyu Pioneer Wine Co. Inc. (200869 CH) is China's largest wine producer, with a domestic market share of 11%.

The company has an illustrious history. It was founded during the Qing dynasty in 1892 by Cheong Fatt Tze, who bought 640,000 plants from Europe to grow grapes in the Shandong province of China. After three years of experimentation, he finally managed to find grapes that were well suited to the climate. The Yantai-Penglai region is now the core of China's wine industry, representing roughly 40% of domestic output.

Changyu is now one of the top three brands in the industry together with Great Wall and Dynasty. Changyu's main Cabernet line costs somewhat above RMB 100 per bottle, but it also has much more affordable alternatives in the RMB 30-60 range. While the quality of their wines lags those of France or Australia, Changyu has been making progress. It has sought the help of European experts to develop its wines and even sought equity investments from foreign wineries…