Last year, Moutai achieved whole-year sales revenue of 75 billion yuan, up 23 percent year-on-year. Handout.

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Kweichow Moutai Co. Ltd., China’s iconic high-end spirit maker, saw its share price exceed 1,000 yuan (US$145) per share this week, making a historical breakthrough and becoming the most expensive stock in the A-share market, aided by continuously growing demand and its good earnings.

Most investors are not surprised by the robust performance of Moutai. Earlier this year, many investment firms, including Goldman Sachs and China International Capital Corp. Ltd., were bullish on the growth potential of the stock.

They set the target price of Moutai at more than 1,000 yuan per share, attributing it to China’s sustained supply-side reforms and consumption upgrade, which have boosted investor sentiment toward such consumer stocks, the report said.

Moutai, a distiller from Maotai town in southwestern China’s Guizhou province, has made substantial gains this year. On Jan 1, it closed at 598.98 yuan per share. On Thursday, it closed at 996.35 yuan per share, and its share price has surged 66% so far this year. Its performance has been better than 90% of the A-share listed companies.

Its market value now stands at a impressive 1.24 trillion yuan. Last year, the overall GDP of Guizhou province reached 1.48 trillion yuan, meaning the market value of Moutai accounts for nearly 85% of provincial GDP.

Moutai became the first stock that exceeded 1,000 yuan per share after 27 years. More than two decades ago, there was a stock — now named INESA Holding Group — which once exceeded 1,000 yuan per share. The company has experienced multiple structural changes and now its market value is less than 10 billion yuan.

Other major liquor makers are reporting solid sales and also saw outstanding performance during Thursday trading. They include Sichuan province-based Wuliangye Yibin Co. Ltd. and LuzhouLaojiao Group, which led the advance of the spirits and consumer sector.

Last year, Moutai achieved whole-year sales revenue of 75 billion yuan, up 23% year-on-year. Its net profit totalled 34 billion yuan, jumping 25% over the previous year, its earnings report said.

This year, Moutai aims to achieve sales revenue of 100 billion yuan, growing 14% year-on-year, and reaching a net profit of 45 billion yuan. The company said it is strong and confident enough to drive further growth.

“The stock market now shows a prominent problem of polarization,” said Yang Delong, chief economist at First Seafront Fund. “Leading white-horse stocks have seen continued steady growth. The climbing share price of Moutai definitely gave a boost to many white-horse stocks, with the prices of several stocks reaching their new high, while some other themed stocks are being marginalized.”

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