Drinkers of China’s most iconic alcoholic tipple have helped its maker Kweichow Moutai Co climb to the top of the global consumer stocks, after nudging a luxury handbag manufacturer out of the way.
On Thursday the Shanghai-listed company replaced LVMH Moet Hennessy Louis Vuitton SE as the most valuable stock on Bloomberg Intelligence’s Global Luxury Goods Top Peers Index when rated by market capitalization.
Moutai’s market value has risen to 990 billion yuan ($153.2 billion), compared with 122 billion euros (US$146 billion) for the global empire of LVMH, which sells Louis Vuitton, Dior, Celine and other top brands.
The Chinese firm’s shares have surged since the distiller announced an 18% price rise two weeks ago for its potent baijiu, Flying Fairy, the first since 2013. After a strong year in 2017 when the stock’s price rose 150%, it closed at a record high of 788 yuan (US$121.68) on Friday.
The Shanghai Composite index is still well below its peak of 6,124, also recorded in 2007, so the moutai may have to stay on ice a bit longer.
Kweichow Moutai has the exclusive rights to sell moutai, a liquor distilled from fermented sorghum, wheat and water. Created in the Western Han Dynasty in 135 BC, the drink gained popularity after it was endorsed by Emperor Wu (Liu Che), whose ambassador Tang Meng had brought some back from Yelang, now Guizhou.
The company only sells 5% of its liquor outside China, but demand from the mainland market has been strong enough to cement its global position.
On Friday the stock helped the Shanghai Composite Index maintain a 10-day rally, closing at 3,428. But it is still trailing behind the blue-chip Hang Seng Index, which posted its 13th consecutive day of gains since December 20, though only with a modest 6.3% rise.
Both markets are expected to continue tracking the global surge in stocks. The Hang Seng topped all major indices with a 35% return in 2017, after a mediocre 6% gain in the previous year, and is now poised to break its historic high of 32,000 in 2007.
However, the Shanghai Composite index is still well below its peak of 6,124, also recorded in 2007, so the moutai may have to stay on ice a bit longer.