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Kweichow Moutai makes CNY85.7 billion profit in 2024
China’s biggest liquor producer Kweichow Moutai has said it will meet its revenue growth target for 2024 despite lacklustre consumer sentiment in its home market.
The Chinese liquor giant released a statement on Thursday (2 January) announcing that it expects its 2024 revenue to rise around 15% to CNY173.8 billion (£18.9bn), meeting the company’s targets.
Kweichow Moutai, the biggest alcohol producer in the world, is due to release its official annual results in late March or early April.
But its early predictions mean it expects to post a 2024 net profit of around CNY85.7 billion (£9.3bn), up 15%.
Moutai baijiu, the company’s Chinese liquor brand, was responsible for the bulk of its revenue in 2024, generating CNY145.8 billion.
The company is battling slumping wholesale prices and subdued consumer sentiment in its home market of China.
Kweichow Moutai has cut back on output volumes for the first time since 2014 as it sought to stabilise wholesale prices of its products, according to Morningstar. Analysts have said this strategy will support growth in the long run.
Shares in the baijiu maker ended 12% lower last year, underperforming the more than 10% increase in the benchmark Shanghai Composite Index.
In January last year, the drinks business revealed that Kweichow Moutai had lost its top spot as China’s most valuable company. Mobile comms firm Tencent snatched the crown while Alibaba fell into the second slot, with Kweichow sliding to third place.
The firm continued to struggle throughout the year against tough market conditions, and average sale prices at prime wholesalers fell roughly 5% to about CNY2,250 a bottle in September despite it being a prime festive season for family celebrations and gifting.
But net profits in 2024 are higher than they were at the end of 2023, when the company made CNY74.73 billion, compared to the CNY85.7bn last year.
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