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Kweichow Moutai shares plunge as drinkers turn their backs on world’s most valuable liquor distillery

  • Third-quarter profit growth for Kweichow Moutai slowed to 2.7 per cent, the worst performance in nine quarters
  • Moutai has lost 314.2 billion yuan in value since June, more than the 2017 economy of its home city Zunyi

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Assembly workers at Moutai’s factory in Guizhou province. Photo: Bloomberg
Zhang Shidongin Shanghai
Kweichow Moutai, the distiller of China's most expensive liquor and the fifth-largest stock on Shanghai’s benchmark index, plunged for the fifth day, as investors piled out of a company that is suffering from its slowest earnings growth in almost three years.
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Moutai’s shares plummeted by their 10 per cent daily limit to 549.09 yuan in Shanghai. It’s the first time since September 2013 for the distillery, considered a bellwether of China’s consumer stocks, to suffer the ignominy of a limit down, a sign that shareholders are bailing. 

China’s economy grew at the slowest quarterly pace in a decade in the three months ended September, a slow-down that is crimping consumption, especially in high-end products like Moutai’s flagship baijiu liquor, where a half-litre bottle with 53 per cent alcohol content retails at 1,499 yuan (US$215).

Third-quarter profit for the distiller, based in Zunyi in southeastern China’s Guizhou province, rose 2.7 per cent to 9.65 billion yuan (US$1.39 billion), while sales growth slowed to 3 per cent.

“Moutai would need to achieve close to 70 per cent growth in the fourth quarter to reach its second-half target,” Bloomberg’s analysts Li Shen and Pang Kaitung wrote. “With weakening consumer sentiment associated with a slowing property market and the trade war, the result may signal the start of slowing growth for the liquor giant.”

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