Kweichow Moutai Uncorks Financial Services

The world’s most valuable alcohol producer, China’s Kweichow Moutai Co. Ltd., plans to consolidate its lending and other financial services into a single financial holding unit to improve efficiency.

The $92.8-billion premium grain liquor company currently has its fingers on lending, fund management, leasing and insurance. By putting all these businesses under one roof, they will “play a significant role” in Moutai’s vast booze empire, the company said in a statement.

The unit will apply to the financial regulator for an operating license, said people close to the Guizhou-based alcohol maker, adding that Moutai plans to expand its lending to other companies in its supply chain.

Late last month, Moutai had announced a plan to inject 867 million yuan ($130.2 million) of cash into a nonbank financing unit, in which Moutai holds 51% and its parent group and other sister units hold most of the remaining stake. After the injection, the registered capital of the financing unit would rise to 2.5 billion yuan, according to regulatory filings.

Moutai has extensive sales network across China, and its fortunes are boosted by a return of business drinking as a years-long government crackdown on graft fades away. The company, whose sales are mostly domestic, posted a net profit of 11.3 billion yuan for the first half this year, up by 27.81% from the same period of the previous year.

The liquor-maker also holds equity stakes in eight financial institutions, including Bank of Guizhou Co. Ltd. and Bank of Guiyang Co. Ltd, Moutai said earlier.

Shares of Moutai fell 1.3% to 485.10 yuan on Friday. The stock overtook U.K. counterpart Diageo PLC as the world’s largest liquor-maker by market capitalization in April.

Contact reporter Dong Tongjian (tongjiandong@caixin.com)