What’s new: China’s legacy liquor giant Kweichow Moutai Co. Ltd. reported a year-on-year profit increase of 12.35% for the third quarter, amid a regulatory push to curb the retail prices of luxury “baijiu” in the country.
In the three months through September, Kweichow Moutai’s net profit attributable to ordinary shareholders totaled 12.6 billion yuan ($1.9 billion) on revenues of 25.6 billion yuan, which represented a year-on-year increase of 9.86%, according to its latest earnings report on Saturday.
Revenues generated from direct sales channels hit an all-time high of 5.18 billion yuan, up 57.93% year-on-year and accounting for 20.3% of the total, the firm said.
As of the end of September, Kweichow Moutai had 175,267 shareholders, up 28,969 from the end of June, according to the report.
The background: This is the first earnings report from the company after Ding Xiongjun, who used to serve as director of the Guizhou Provincial Energy Bureau, assumed the role of chairman and director of Kweichow Moutai Group and its subsidiaries last month.
At a stockholders’ meeting last month, Ding pushed for reforms to corporate management, asset management as well as marketing and pricing, according to an exchange filing.
The earnings report also comes at a time regulators are trying to make the baijiu market “more orderly.” On Aug. 20, China’s State Administration for Market Regulation hauled in representatives from baijiu firms and their investors to discuss runaway prices of the luxury liquor once associated with long lunches of bureaucrats and businessmen. Also on the agenda was the flood of private equity capital into such firms.
Read more The Volatile Cocktail Stirring Up China’s Baijiu Market
Contact reporter Ding Yi (yiding@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)
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