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Kweichow Moutai makes US$10.3bn profit
The world’s biggest alcohol group, China’s Kweichow Moutai, made net profits of 74.73 billion yuan (US$10.33 billion) in 2023.
That was 19% above the 2022 level, slightly higher than it originally predicted, and was due to increased volumes for its baijius and a growing emphasis on online sales direct to the consumer, the company said.
In addition, the distiller has broadened its product portfolio by producing baijiu infused varieties of coffee in conjunction with national chain Luckin, ice cream with the dairy company Mengniu and even chocolates in a joint venture with Mars’ Dove brand.
The company said it is aiming for continuous sales growth this year, and is targeting operating revenue growth of 15%.
Dividend
Moutai has declared a dividend of CNY308.76 (US$43) per 10 shares.
In 2023 It paid CNY56.55 billion (US$7.82 billion) in dividends, which was 75.67% of its annual net profit.
Investors are expecting a similar level of payout this year.
Most of that will go to its home state government of Guizou province, which owns 61% of the company.
However, outside investors can take stakes in the distillery, which is the largest non-technology company in China, through the Shanghai stock market or via Hong Kong-based mutual funds.
With its shares standing at 1714 yuan (US$ 237) It is now valued at approximately US$ 300 billion, compared with nearest rival Diageo’s US$83 billion.
At their peak in 2021 the shares were 2601 yuan (US$360), valuing the company at more than US$ 400 billion.
Growth
The news follows reports earlier this year, where db reported that despite sales increasing by 17.2% the drinks giant has still lost its top spot as China’s most valuable company.
Kweichow Moutai has been expanding its product range to appeal to younger age groups in China, and according to financial analyst group Caixin Global its latest range extension is a partnership with privately-owned chocolate giant Mars to launch an alcohol-infused chocolate.
The chocolate, which has received bullish reviews, is Moutai’s latest effort to give its products extra appeal through partnerships with well-known consumer brands.
Last autumn China’s Luckin Coffee chain collaborated with Moutai on a new product called “soy sauce latte” that spikes Luckin’s coffee with baijiu.
The coffee chain said that on launch day it sold more than 5.42 million cups of Moutai alcohol-infused lattes, worth more than 100 million yuan (US$13.69 million).
In 2022, Kweichow Moutai opened its first ice cream store selling up to 14 flavours infused with baijiu.
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