Kweichow Moutai, the world’s most valuable liquor maker and Mao Zedong’s favourite tipple, has another milestone in its sights
- Kweichow Moutai may soon become the first Chinese listed companies with a share price above 1,000 yuan
- Analysts predicts the stock will rise further once the gateway is hit
Kweichow Moutai has another milestone in its sights.
After unseating Diageo as the world’s most valuable alcohol maker and seeing its market cap top 1 trillion yuan (US$148.5 billion), the Chinese fiery liquor juggernaut’s share price is nearing 1,000 yuan (US$148.56). A further 5.8 per cent gain would make Kweichow Moutai the first of the 3,000-plus mainland-traded companies ever to do so.
And the run-up is unlikely to end there. Analysts’ calls suggest the distiller’s stock will continue to ascend well beyond the 1,000-yuan mark. At least five investment banks including Goldman Sachs and Guotai Junan Securities have set price targets above 1,000 yuan.
CSC Financial, a Beijing-based brokerage, is the most bullish, predicting Kweichow Moutai’s shares will rise to 1,150 yuan. Investors including Hengsheng Asset Management agree.
I can’t see any growth cap on the company in the long run, unless the Chinese don’t drink one day
“Moutai remains a very good buy-and-hold investment,” said Dai Ming, a fund manager at Hengshen Asset in Shanghai. “I can’t see any growth cap on the company in the long run, unless the Chinese don’t drink one day. The liquor culture is deep-rooted in China and when you do business here, you drink. It’s a product with demand outstripping supply, so growth is quite visible.”