Moutai leads the liquor sector rally

Updated 2017-06-15 11:02:39 Global Times

Institutional investors continue to bullish on the beverage stocks to seek haven: experts

High-end liquor maker Kweichow Moutai outperformed the Chinese mainland's A-share market on Wednesday. Shanghai-listed Kweichow Moutai closed 0.29 percent higher to 474.39 yuan on Wednesday.

As of May 5, the capitalization of 19 A-share-listed liquor makers stood at 1 trillion yuan. But only 26 days later, the value of the four leading producers had reached that level.

From January to June, share prices of the four firms Wuliangye Yibin Co, Luzhou Laojiao Co, Kweichow Moutai and Jiangsu Yanghe Brewery increased around 62 percent, 54 percent, 42 percent and 29 percent, respectively.

"The huge rally in the liquor sector ... has been mainly driven by fundamentals and investors can reap returns in the medium term," Zhang Xin, a senior analyst at the Beijing office of Guotai Junan Securities, told the Global Times on Wednesday.

However, the situation is quite different from foreign markets, where it's usually finance, energy and high-technology issues that outperform the market, noted Zhang.

Zhang said that institutional investors will remain bullish on liquor producers in the short term as they seek a haven from the sluggish real estate market and slowing economic growth in China.

Moutai's market value reached .1 billion, making it the world's most valuable liquor maker, according to a report by Huffington Post on June 11. Alibaba's market value is currently 0 billion.

Indeed, Kweichow Moutai led the rise this time, but not all the liquor makers perform well, Xue Yuhu, chief analyst at the Shanghai office of Founder Securities, told the Global Times on Wednesday.

Xue said that many unknown liquor makers still underperformed the market, noting that the situation will continue in the following two to three years.

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