Holiday season gives Moutai cheer

Kweichow Moutai Co, the best-known high-end Chinese liquor, has witnessed rising demand and a supply shortage in the weeks leading up to Mid-Autumn Lantern Festival and the National Day holiday.

With more people ordering Moutai for family dinners and banquets, retailers said they are experiencing a shortage, and expect a further jump in business with the arrival of the festival.

A 500 ml bottle of Moutai's classic Feitian 53 percent liquor has been selling for as much as 1,299 yuan ($195) on JD.com, one of China's leading online shopping platforms. Consumers need to click the "rush to purchase" button as the stock is tight, and each account can only purchase one bottle at this price.

Starting from Aug 15, Moutai plans to supply 4,500 tons of liquor to increase the inventory.

At some supermarkets and liquor stores, a 500 ml bottle of Moutai's classic Feitian 53 percent liquor retails for as much as 1,500 yuan.

In order to control the market price, Moutai appointed 70 sales outlets in Beijing to provide products at 1,299 yuan per bottle, and the company will soon apply similar policies nationwide.

Meanwhile, its share price has been consistently advancing. So far, the share price of Moutai has surged nearly 50 percent this year. Moutai's market value exceeded 600 billion yuan, which topped that of other global liquor producers.

On Monday, Moutai shares jumped 3.26 percent to close at 499.83 yuan ($75). Its share price is now the highest among listed Chinese companies.

At one point during trading on Monday, its share price reached a record 500.1 yuan, becoming the first Chinese stock to be traded at more than 500 yuan in the A-share market.

In addition, the performance of other leading Chinese liquor companies has been outstanding. On Monday, shares of Sichuan-based Wuliangye climbed 2.46 percent to close at 57.38 yuan, and shares of Sichuan-based LuzhouLaojiao Group edged up 0.72 percent.

Shenwan Hongyuan Securities said Chinese liquor has been performing well and exceeding expectations in the second quarter. The price of Moutai is likely to increase in the second half year amid a bullish market.

In the next two to three years, Moutai's imbalance between supply and demand is expected to level off, and its price has the potential to continue to rise, it said.

BOC International said it will maintain a buy rating for Moutai shares. It forecasts that in 2018, the share price of Moutai is expected to reach 600 yuan, higher than its earlier prediction of 550 yuan.

Contact the writers at zhuwenqian@chinadaily.com.cn