Drink to that

The new luxury: Moutai is worth more than Rmb1 trillion

We first mentioned China’s prestigious white liquor Moutai in March 2009 (in issue WiC7) and according to our web archive we have featured the baijiu in 52 articles since. Our 53rd mention once again touches on what has become a recurrent theme: its listed parent’s dizzying market capitalissation.

This week Kweichow Moutai, the high-end spirit maker from Guizhou, hit a record high, with the Shanghai-listed firm briefly seeing its market value top Rmb1 trillion ($155 billion). According to China Daily, that made it the first consumer stock in the country to exceed the one trillion yuan figure.

The distiller – which plans to produce 120,000 tonnes of white spirits this year – has become one of the 15 most highly valued Chinese stocks.

In terms of international comparisons Securities Times chooses to benchmark Kweichow Moutai against the world’s largest luxury goods group LVMH. At its peak this week it exceeded the French giant’s market value of $148.9 billion which prompted the newspaper to observe: “Moutai has become the world’s largest luxury goods company by market capitalisation.”

Some would dispute whether a booze company – albeit one whose product sells for around Rmb1,499 a bottle and which plans to raise prices 18% this year – falls into the luxury goods category. LVMH sells wines and and spirits too (hence the Moet Hennessy in its name to indicate its champagnes and cognacs) but its portfolio is more known for more traditional luxury fare such as leather goods and pricey fashion labels like Christian Dior, Fendi and Louis Vuitton itself.

And Securities Times does point out there remains a huge disparity in the two groups’ sales. Moutai’s revenues for 2017 reached Rmb76.4 billion, or €9.64 billion, which is less than a quarter of LVMH’s sales. The French firm’s full year figures are not yet available but in the first three quarters it sold €30.1 billion of goods, suggesting full year sales ought to exceed €40 billion.

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