The liquor maker’s counter, which has slipped about 25% this year, is setting the company up for its worst annual performance since 2013
SHARES of Kweichow Moutai were set for their biggest-ever fall in trading for the day before the Mid-Autumn festival as China’s sluggish economy dented demand for its liquor and other premium goods.
The stock fell as much as 2.8 per cent on Friday (Sep 13), their lowest level since May 2020. Moutai’s flagship liquor, Feitian, saw prices slide earlier this year as the nation’s property slump and economic worries reduced the number of occasions when the high-end beverage may be consumed.
“Looking ahead, we see that the characteristics of ‘de-real estate dependence’ and ‘de-luxury’ in liquor consumption will continue to stand out,” said analysts at Guotai Junan Securities.
“The sales volume of the liquor industry in August and September has slightly rebounded month on month, but the total demand in most regions has still fallen year on year.”
Moutai’s shares have slipped almost 25 per cent this year, setting them up for their worst annual performance since 2013, when government spending and dining took a hit by the sweeping anti-graft campaign.
Even as Moutai aims for 15 per cent operating revenue growth in 2024, analysts have been cutting target prices on the liquor maker.
Next week’s three-day festival and the upcoming Golden Week peak season are among the highest sales periods for the world’s second-largest economy.
Moutai, which lost its spot in June as China’s most valuable onshore equity, is often seen as a barometer of consumer sentiment. BLOOMBERG
