Kweichow Moutai Co Ltd, China's signature high-end spirit maker, announced on Thursday that it would raise the prices of its products by an average of 18 percent next year.
A 500ml bottle of Moutai's classic Feitian 53 percent liquor currently retails for 1,299 yuan (9) on JD, one of China's leading online shopping platforms, and consumers need to make an appointment online to reserve the product first.
Li Baofang, general manager of Moutai Group, said this would be the first price change since 2012, and Moutai has been making efforts to control the price and avoid speculation.
"In the long term, price adjustment follows the trend and we can't avoid it. This time, the adjustment range is moderate, and it is suitable for what the public can afford and also takes into consideration the potential profits of distributors," Li said.
Shanghai-listed Kweichow Moutai saw its shares surge 8.21 percent to close at 718.69 yuan on Thursday, and its market value has exceeded 800 billion yuan.
It has been one of the most bullish stocks in the A-share market this year, and its share price is now the highest among listed Chinese companies. On Nov 16, Moutai shares closed at a record high of 719.96 yuan.
The distiller from the town of Maotai, Guizhou province, also said that by the year end, it expects the sales volume of Moutai liquor to grow by around 34 percent year-on-year, and sales revenues to reach 60 billion yuan, up 50 percent from a year earlier. In 2018, Moutai aims to increase its sales revenues by 10 percent year-on-year, according to its statement made on Thursday.
Meanwhile, the company forecasted that its total profits this year are expected to jump 58 percent on the previous year, boosted by the continuing popular sales of its products and higher demand from China's expanding high-income consumers.
In the year to date, Moutai shares have been constantly advancing and so far surged around 102 percent, and many agencies have continued to raise their earnings forecasts.
Su Cheng, a food and beverage analyst at Essence Securities, said the market value of Moutai is expected to reach 1.85 trillion yuan, and he will maintain a "recommend" grade for Moutai, and temporarily raised the target price of its stock to 900 yuan.
Shares of many other leading Chinese liquor producers, including Sichuan-based Wuliangye and Sichuan-based Luzhou Laojiao Group, also gained on Thursday.