SHANGHAI (Reuters) - China’s Kweichow Moutai Co Ltd, the world’s most valuable liquor maker, said on Friday its 2016 net profit rose 7.8 percent driven by private consumers, in a return to stronger growth after years of sluggish earnings and sales.
The firm, China’s top maker of fiery alcohol baijiu that can cost over $300 per bottle, said full-year net profit was 16.7 billion yuan ($2.43 billion), just behind analyst forecasts of 16.9 billion yuan.
Moutai’s stock has rocketed 300 percent since the start of 2014, as Chinese investors shrugged off sales and profits taking a knock from a nationwide crackdown on corruption and overt signs of luxury launched by President Xi Jinping in 2012.
That rise has propelled Moutai’s market capitalization, currently around 500 billion yuan ($72.64 billion), past Smirnoff vodka and Guinness brewer Diageo PLC.
The firm, whose pungent liquor has long been a lubricant for official Chinese banquets and business dinners, said the global economy remained uncertain and competition was fierce, but that the longer-term outlook for the baijiu market was strong.
The profit rise marks a turn-around for the firm - once hailed as helping China’s Red Army survive the tortuous Long March in the 1930s - after two years of flat profits and sales as the firm was forced to cut prices and shift sales online.
Moutai said in February it expected first-quarter net profit to rise 15.9 percent to 5.7 billion yuan.
Its 2016 revenue rose 18.9 percent to 38.9 billion yuan, slightly ahead of forecasts of 38.6 billion yuan according to 25 analysts polled by Reuters. That still puts it behind UK-headquartered Diageo, which had revenue of around 10.5 billion pounds ($13.1 billion).
Domestic rival Wuliangye Yibin Co Ltd’s net profit climbed 9.85 percent to 6.8 billion yuan.
Reporting by Adam Jourdan; editing by Susan Thomas