SHANGHAI, March 27 (Reuters) - China’s Kweichow Moutai Co , the world’s most valuable liquor maker, increased profit at the fastest rate for six years in 2017 as a broader revival in the country’s luxury sector buoyed sales of its premium spirit, baijiu.
The company’s full-year results marked a return to the days of bubbling profits last seen in 2012 before a crackdown on corruption and luxury under President Xi Jinping weighed on growth.
Moutai, which sells its Feitian 53 baijiu for close to $250 per 500 ml bottle, raked in full-year net profit of 27.1 billion yuan ($4.32 billion). That was up 62 percent on 2016 and also beat the 25.8 billion yuan average forecast from 23 analysts polled by Thomson Reuters.
Despite the government’s luxury crackdown, Moutai’s shares have chalked up an almost sevenfold price rise since the start of 2014 and doubled last year. The shares remain flat so far this year after concerns were raised over a potential share price bubble.
Moutai has a market value of more than $140 billion, ahead of Smirnoff vodka and Guinness owner Diageo.
In December Moutai said it expected 2017 revenue to have jumped by 50 percent with profits up about 58 percent, but that sales growth would moderate in 2018.
Moutai, whose pungent liquor is often a lubricant for official Chinese banquets and business dinners, said private and business consumption had become the main drivers of growth.
The brand also has close ties with Chinese politics and culture, drawing on its long history as the national liquor of choice, once hailed as helping China’s Red Army survive the tortuous Long March in the 1930s.
Moutai’s 2017 revenue rose 49.8 percent to 58.2 billion yuan, slightly ahead of forecasts of 58.1 billion yuan.
China’s luxury market grew at its fastest since 2011 with a 20 percent jump last year, according to Bain & Co. ($1 = 6.2780 Chinese yuan renminbi) (Reporting by Adam Jourdan Editing by Himani Sarkar and David Goodman)