- Company revenues up by +21% in the first six months of 2023 to CNY69.58bn [US$9.7bn]
- Surge in direct sales and usage of the i-Moutai ecommerce app
- Demand for Moutai “resiliently strong”, says Citi
Baijiu powerhouse Kweichow Moutai overcame concerns about negative trends for Chinese white spirits, increasing company revenues by more than one-fifth in the first half of 2023.
The revenue increase for the six months to the end of June, reported to the Shanghai Stock Exchange, followed a +20% sales uplift in the second quarter, and came in well ahead of the company’s fiscal 2023 guidance of +15% revenue growth.
A note from bank and financial services organisation Citi highlighted a +35% surge in direct sales during the second quarter, with the company’s i-Moutai app now having 42m registered users, contributing sales of CNY9.3bn in the first half as a whole.
Sales of sub-brands, Citi added, rose by +21% in the second quarter, mirroring the growth of the core Moutai brand.
“We believe that market demand for Moutai product remains resiliently strong, with low risk of channel de-stocking [which is usually triggered by significant market price correction],” Citi said.
“Moutai enjoys the strongest branding power, highest margins, best return on capital and strongest free cash flow in China’s baijiu industry, warranting a valuation premium over peers, in our view.”
Earlier this week, Diageo announced a -4% sales decline in Greater China in fiscal 2023, with growth in Scotch more than offset by a decline for Chinese white spirits.
CFO Lavanya Chandrashekar blamed the lingering impact of Covid-19 restrictions on baijiu Shui Jing Fang’s core banqueting consumption occasion.
Baijiu still tops the spirits charts in China, but for how long? – Market Intel
