Mar 04, 2021 05:22 AM

Kweichow Moutai’s Home Base Aims to Double Liquor Industry

Based on the closing price Tuesday, Kweichow Moutai had a market value of $400 billion.
Based on the closing price Tuesday, Kweichow Moutai had a market value of $400 billion.

China wants people to drink more liquor in the next five years, according to the new five-year development plan of southwest China’s Guizhou province, the home of the world’s most valuable liquor-maker Kweichow Moutai (600519.SH).

Guizhou’s plan targets yearly output of baijiu, a clear liquor made from sorghum and other grains, to reach 600 million liters by 2025 and a liquor industry value of 250 billion yuan ($38.7 billion). The goal means a 20% expansion in liquor output and a doubling of value from 2020.

Guizhou is one of China’s poorest provinces. Local governments have been struggling with debt as several of its cities reported delayed repayments of nonstandard debt products like trust loans. At the end of 2019, the provincial government had repayment obligations of 967.3 billion yuan of outstanding debt, the seventh-largest among the mainland’s 31 provincial-level regions, according to a report from securities brokerage Guotai Junan Securities Co. Ltd.

China Kweichow Moutai Winery Group Co. Ltd., wholly owned by the provincial State-owned Assets Supervision and Administration Commission (SASAC) in Guizhou province, has repeatedly come to the local government’s rescue with massive bond purchases. Kweichow Moutai Co. Ltd. is a Shanghai-listed unit of Kweichow Moutai Winery Group.

Guizhou wants to build Kweichow Moutai, into a “global 500” enterprise. The company is now mainland China’s biggest public company by market value. Based on the closing price Tuesday, Kweichow Moutai had a market value of 2.59 trillion yuan, compared with the 1.78 trillion yuan of GDP in its home province in 2020.

The province is also home to a number of other liquor brands, including Moutai’s sister brand Xi Jiu, Guotai, Jinsha, Zhenjiu and Dongjiu. The five-year plan also aims to take some of them public. Kweichow Moutai is currently the only listed liquor maker in the province.

Guizhou Guotai Liquor, another unit of Kweichow Moutai Winery Group, filed for a 2.5 billion yuan IPO in Shanghai in May.

The broader value of baijiu is expected to continue on a bullish trend this year, according to a report from Minsheng Securities. The report pointed out that such spirits have been traded as a form of investment and that such trends could help to further drive up Moutai and other baijiu shares.

Contact reporter Denise Jia ( and editor Bob Simison (

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