Kweichow Moutai value tops 1.8tn yuan

Distiller confirms place at the top of the world’s booze makers and both Chinese exchanges; analysts warn share surge may not be sustained

by Nadeem Xu
Kweichow Moutai value tops 1.8tn yuan
Chin-chin: Liquor maker Kweichou Moutai’s 'national drink’ sees market cap soar. Photo: Wikimedia   

(ATF) Kweichow Moutai, whose traditional sorghum-based Maotai liquor is raised to toast state banquets and village weddings alike, has confirmed its position as the world’s most valuable distiller. 

The Maotai, Guizhou Province-based company saw its market capitalisation surge to almost 1.8 trillion yuan ($251.75 billion) on Monday when its shares surged to a record HKD1,427.65 ($184.2) in in Hong Kong trading.

Moutai’s valuation put it above Industrial and Commercial Bank of China and tops the Shanghai and Shenzhen stock exchanges. 

Because the distiller’s products are drunk year-round and enjoy huge prestige as China’s “national drink”, its shares are considered “defensive” - meaning they're likely to hold their value even during a downturn.

Research firm Morningstar, however, warned earlier this year the brand’s soaring shares are overvalued. It said in a note that market expectations of a rebound in China’s economy after the coronavirus pandemic may be exaggerated and that could hurt Moutai’s valuation.

Describing the stock’s rise as “unsustainable”, Morningstar said "we expect the company to increase its operating expenses... given that the sales growth of midrange liquor was lower than we had expected”. 

READ MORE: Ex-transport boss grabs reins at Kweichow Moutai