Kweichow Moutai, maker of Mao’s favourite liquor, ends 2020 with mixed report card as stock hits all-time high

Name: Baijiu, China's national spirit, seeking markets abroad where taste still fails to intoxicate
Uploaded: 2021-01-01T04:30:16.000Z
Duration: 1 min 56 s
Description: Baijiu, China's national spirit, seeking markets abroad where taste still fails to intoxicate

Sales of China’s national drink rose 10 per cent in 2020 while earnings trailed consensus forecasts

Stock advanced 69 per cent to close at a record 1,998 yuan in Shenzhen, giving it a market value of US$384.5 billion

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

Bloomberg

Published: 12:30pm, 1 Jan 2021Updated: 10:51pm, 1 Jan 2021

Kweichow Moutai said its revenue rose about 10 per cent for 2020, the slowest growth in five years, as the world’s most valuable distiller of Mao Zedong’s favourite tipple, stays cautious in raising prices of its prized liquor to avoid attention from China’s regulators.

The sales numbers, based on preliminary calculations reported late Thursday, are in line with the company’s initial guidance set at the beginning of the year and just below the consensus forecast of 10.6 per cent in a Bloomberg survey of 27 analysts.

The Shenzhen-listed baijiu maker’s full-year net income of 45.5 billion yuan (US$7 billion) was below an estimate of 46.46 billion yuan.

Moutai remains an investor darling as its status as China’s national drink and a closely guarded recipe have kept demand strong, even during the coronavirus pandemic. The shares jumped 69 per cent to 1,998 yuan in 2020, ending the year at an all-time high and a market value of 2.5 trillion yuan.

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Baijiu, China's national spirit, seeking markets abroad where taste still fails to intoxicate

The state-owned distiller did not raise the factory-gate price of the group’s core baijiu product Feitian, which has remained at 969 yuan a half-litre for three years. The retail price, however, has surged to about 3,000 yuan from 2,000 yuan at the beginning of 2020 as China’s growing middle class seeks out scarce bottles.