By Sherry Qin
Chinese liquor giant Kweichow Moutai reported solid sales and profit in the third quarter despite lackluster consumer sentiment and slumping wholesale prices in the world's second-largest economy.
China's most valuable liquor brand said Friday that net profit rose 13% from a year earlier to 19.13 billion yuan, equivalent to $2.69 billion.
Quarterly revenue climbed 15% to 38.845 billion yuan. That took revenue for the first nine months of the year to 120.78 billion yuan, up 17% from the year-ago period.
Moutai in late September announced its first-ever share repurchase plan, offering to buy back 3 billion yuan to 6 billion yuan of shares over the next 12 months.
Together with the move to lift its regular dividend payout ratio to 75% from 52%, "the company has increasingly demonstrated its willingness to return more cash to shareholders," Citi analysts said in a recent research note.
Moutai, once China's biggest public company on the mainland, has seen its share price decline this year as wholesale prices drop amid tepid consumer sentiment. Average sale prices at first-tier wholesalers fell roughly 5% to about 2,250 yuan a bottle in late September from early in the month despite it being a seasonally strong period with festive sales.
Citi expects Moutai to unveil further plans to stabilize wholesale average selling prices over the next six months to restore investor confidence in the long-term outlook.
Shares in the baijiu maker have declined nearly 10% in 2024, compared with the more than 10% increase in the benchmark Shanghai Composite Index.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
October 25, 2024 07:29 ET (11:29 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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