On the evening of May 18, Chinese high-end liquor maker Kweichow Moutai (SH600519) announced that it intends to cooperate with China's top private equity investment management institutions to establish two industry funds: 5.51 billion yuan Moutai Zhaohua Fund and 5.51 billion yuan Moutai Jinshi Fund.
Kweichow Moutai will subscribe 5 billion yuan of each fund with an investment period of 5 years. “China Merchants Capital”, a partner of Moutai Zhaohua Fund will subscribe 483 million yuan. “Jinshi Investment”, a partner of Moutai Jinshi Fund, will subscribe 500 million yuan.
It is worth noting that at the end of 2022, Kweichow Moutai’s cash and cash equivalents balance on its books was 152.379 billion yuan, accounting for 74.32% of its net assets of 204.965 billion yuan. It is easy to note that even after paying dividends of 32.549 billion yuan and then investing 10 billion yuan in setting up two funds, Kweichow Moutai still has an ample cash flow of more than 100 billion yuan.
In the first quarter of 2023, Kweichow Moutai’s monetary funds and outgoing funds amounted to 177.882 billion yuan, and the investment of 10 billion yuan did not affect the company’s operation.
NBD noticed that Kweichow Moutai is one of the most cash-rich enterprises at present, but its annual yield rate is less than 3%. In comparison, the yield rate set by the above two industry funds is 6% , which is much higher than the former in recent years.
Kweichow Moutai Chairman Ding Xiongjun said that in 2023, the company will focus on achieving a yoy growth of about 15% in revenue.