BEIJING, Jan 2 (Reuters) - China’s signature premium spirits maker Kweichow Moutai on Thursday forecast full-year profit below analyst expectations, sending its shares down 5% in early trading.
The company’s strong grain liquor is a must-have on China’s banquet tables as a symbol of wealth and power and demand for the bottles are seen as an indicator of luxury appetite in the world’s second-largest economy.
Kweichow Moutai expects 2019 net profit, attributable to shareholders, to jump 15% year-on-year to 40.5 billion yuan. However, this fell short of analysts’ estimates of 43.1 billion yuan, a 22% increase, according to Refinitiv data.
The company, which nearly doubled its market value last year to become one of China’s highest-valued firms, also said 2019 revenue would rise by 15% to roughly 88.5 billion yuan, but would post more modest growth of 10% in 2020.
The world’s most profitable distiller has been pursuing a revamp of its distribution network since the arrest of its former chairman, and last month said it would open a new e-commerce firm this year after abruptly shutting the old one.
The company expects to sell 34,500 tons of Moutai in 2020, up 11%, according to a stock market filing last week.
Some analysts, however, attributed the firm’s share price dip as being a knee-jerk reaction.
“For the long term, Moutai is still good,” said Li Daxiao, chief economist of Yingda Securities, dispensing concerns that the country’s consumption sector might be under pressure in a slowing economy.
“Investors have high expectations on Moutai so every time it misses the expectation, the market over reacts.” (Reporting by Sophie Yu and Brenda Goh; Editing by Shailesh Kuber)