Kweichow Moutai, world’s most valuable liquor maker, feels impact of China’s slowing economy, but analysts remain bullish

Kweichow Moutai, the world’s biggest liquor distiller, reported a slowdown in earnings for three consecutive quarters

Still Chinese brokerages have raised their target price for the stock despite scepticism over its shipments

2-MIN READ2-MIN

Workers pack bottles of Kweichow Moutai liquor in Renhuai, in the southwest Chinese province of Guizhou. Photo: Xinhua

Published: 3:54pm, 16 Oct 2019Updated: 10:05pm, 16 Oct 2019

China’s economic slowdown may have already worked its way into the nation’s most favoured stock.

Kweichow Moutai, the world’s most valuable liquor maker, disappointed traders with its third-quarter results on Wednesday, with earnings growth slowing for a third straight quarter. The 17.1 per cent increase in net income was also the smallest in a year.

While shares of Kweichow Moutai have been on a roll this year, rising nearly 100 per cent, there has been debate that demand for the upscale alcohol is not totally real, but has to some extent been stoked by speculative hoarding.

Prices of its flagship product, Feitian Mao-tai, fell last month amid speculation that some dealers had dumped some of their liquor hoard.

Bottles of Chinese white wine, Maotai, are pictured on a shelf at a restaurant in Harbin city, in the northeast province of Heilongjiang. Photo: Simon Song

Kweichow Moutai slipped 3.4 per cent from a record high to 1,170 yuan (US$165) on Wednesday in Shanghai, capping the steepest loss in five weeks.