Kweichow Moutai Q3 Earnings Up 55%
October 18 -- Kweichow Moutai Co. Ltd. (600519.SH) posted a 55% year-on-year rise in third-quarter net profit to RMB 1.66 billion, reports stcn.com, citing a company filing.
The spirits maker recorded a 57% y-o-y increase in cumulative net profit to RMB 6.57 billion for the first 3 quarters, with earnings per share of RMB 6.33.
Sales revenue earned during the first nine months increased 46% y-o-y to RMB 13.64 billion.
Kweichow Moutai attributes the higher net profit earned during the first 3 quarters to increased sales volume and higher product prices.
According to the report, several spirits makers had repeatedly hiked prices in 2011. Kweichow Moutai had raised prices on the January 1, 2011, by an average of 20%, while Wuliangye Yibin Co. Ltd. (000858.SZ) hiked prices by between 20% and 30% from Sept. 10.
Kweichow Moutai said rising labor and raw material costs, higher taxes and counterfeit products had impacted the company's operations.
Since the beginning of 2006, the company had hike prices 6 times, by between 10%and 20% each time.
The ex-factory price of 53 degree Feitian Moutai had risen from RMB 318 to RMB 619 per bottle within a period of 5 years, while the retail price had already exceeding the price ceiling set by Kweichow Moutai, with the retail price in some areas exceeding RMB 2,000 per bottle.
According to some distributors, high-end producers such as Moutai and Wuliangye are now accustomed to hiking prices by 10% per year.
According to some analysts, low-end spirits makers are bound to follow the lead set by the high-end producers.
Kweichow Mouta! i closed at RMB 196.4 per share in Shanghai trading today, down 0.35% from the opening.
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