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Apr.23 (NBD) -- The share price of Chinese high-end liquor brand Kweichow Moutai ("Moutai", 600519.SH) continued to smash its yesterday's record by closing slightly higher on Thursday at 1252.26 yuan (176.8 U.S. dollars).  

The surge in share prices came as Moutai's 2019 annual report released on Tuesday night showed solid growth in both revenue and net profits. The company saw its net profit rose 17.05 percent from the previous year, and the revenue was around 85.43 billion yuan in 2019, up 16.01 percent year on year.

Besides, the distillery unveiled the plan to deliver a dividend of 170.25 yuan every ten shares, the highest dividend for each share among all A-shares. But the dividend yield ratio is not high, standing at 1.38 percent calculated at the closing price on April 22, lower than the one-year deposit interest rate of most banks (1.75-2.25 percent). 

The baijiu industry in the country has accelerated the supply-side reform, making the liquor makers that have better brand, product quality and distributing channels are better positioned, noted Moutai.

The liquor maker, which is based in southwest China's Guizhou Province, produced about 75,000 tonnes of base liquor for its Moutai brand and series brands in 2019, up 6.88 percent year on year.

However, it's noticed that Moutai has tuned down its revenue targets. In 2018, the liquor maker set a target of 15 percent year-on-year increase in revenue, and the metrics was adjusted to 14 percent in 2019 and 10 percent in 2020. As a matter of fact, the actual year-on-year revenue increase of 16.01 percent for 2019 is lower than 2018's 26.49 percent and 2017's 49.81 percent.

The slowdown in growth is partly due to Moutai's large market cap, remarked a baijiu expert in the media interview, adding that it is a responsible and sustainable move for the liquor maker to control the growth before its production capacity is fully released.

Moutai Chairman Li Baofang earlier this year said what the company needs is a sustainable and healthier development in 2020.

Several securities companies still gave a buy rating for the baijiu distillery and GF Securities, CITIC Securities and China Merchants Securities raised the target share price to 1,500 yuan and above.

Email: gaohan@nbd.com.cn