With China’s Mid-autumn Festival and National Day holidays coming up, the much sought-after liquor is expected to enter a hot-selling period with price hikes. Kweichow Moutai Co Ltd 600519 Morningstar Rating Rating as of Oct 16, 2020. While its net profit margin was only 1% in 2019, the pandemic caused its bottom line to be negative in the first two quarters of this year. The bonds, offered for the first time by Kweichow Moutai Group and carrying AAA credit rating, will mature in not more than 7 years. “While the highway industry requires sizeable investment and long cycles, Kweichow Moutai Group, with an abundant cashflow, would be a valuable investor,” Cai said. Stock analysis for Kweichow Moutai Co Ltd (600519:Shanghai) including stock price, stock chart, company news, key statistics, fundamentals and company profile. Kweichow Moutai Group recorded revenues of 66.3 billion yuan ($9.7 billion) in the first half. This is how much Moutai is worth based on the industry EV/EBITDA average or Moutai’s 10-year historical average. Moutai has emerged as one of China’s most resilient companies during the coronavirus pandemic. Wuliangye is also a tier-1 maker of “baijiu”, a fiery distilled spirit, that is a distant second after the popular Moutai. File photo by AFP. In 2017, as part of an effort to deepen state-owned enterprise (SOE) reform and optimise resource allocation, the government of Yibin city in Sichuan Province, Wuliangye’s home town, decided to transfer its 37.8% ownership in Yibin Paper Industry Co Ltd at no cost to Wuliangye Group. And like Moutai, there is also an airport in Yibin named after Wuliangye although the company did not need to make any investment in its construction. Once a leading paper mill that produced China’s first paper for newspaper printing, Yibin Paper Industry’s business was struggling, and the government was hoping the liquor giant could help revitalise the business. Before it's here, it's on the Bloomberg Terminal. The highway operator had reportedly exhausted its financing options when most of its highway operation rights were given to banks as collateral. KWEICHOW MOUTAI CO.,LTD. Photo: C.Yong / Imaginechina, AFP. Just last month, Kweichow Moutai Group’s former vice chairman Liu Zili, was sentenced to 11 years and six months in prison for taking bribes. Officials also suspect it could be central to new rounds of corruption. Instead of paying for the acquisition from its own pocket, Kweichow Moutai Group has chosen to raise funds through a bond issuance. View daily, weekly or … Find market predictions, 600519 financials and market news. As of June 2019, 19 Chinese SOEs including China Baowu Steel Group, State Power Investment Corporation, and China Shipbuilding Industry Company had signed debt-to-equity conversion agreements with banks. Find the latest KWEICHOW MOUTAI (600519.SS) stock quote, history, news and other vital information to help you with your stock trading and investing. China kicked off an initital round of debt-to-equity conversions  in 2016, when it got large banks such as China Development Bank, Bank of China, Industrial and Commercial Bank of China, and China Merchants Bank involved. The market reacted negatively to the news, with Kweichow Moutai’s stock price falling 3.16% on September 17 to close at 1,670.5 yuan ($245.60), bringing down the stock prices of similar businesses at the same time. While wealthy SOEs are called on to help their struggling peers get out of financial difficulty, a more common practice is a debt-to-equity conversion with local banks. With holidays coming up, this popular drink is expected to rush of sales. Date Open ... Kweichow Moutai Co. , ... based on an analysis of the firm’s balance sheet and inputs from the stock market. It plans to temporarily invest unused proceeds from the bond offering in stable and high-liquidity financial products, such as treasury bonds, policy bank bonds and local government bonds, according to its prospectus. When we also consider that Moutai is publicly traded on the stock exchange – and is the most valuable liquor brand in the world – sales at high prices can leave China in a healthy financial position. It has been continuously borrowing money from banks to build highway infrastructure and has 260 billion yuan ($38.2 billion) of interest-bearing debt. Its flagship product Flying Fairy continued to see the price of a half-liter bottle rise to about 3,000 yuan even after China’s discipline inspector for the Communist Party warned about high liquor prices and urged regulators to further crack down on illegal extravagant activities. Download Reset. The stock is now trading at 1,460 yuan. After its performance began to pick up in 2018, Yibin Paper Industry’s net profit declined again in 2019. The liquor group’s former top executives have also constantly appeared in the press for corruption scandals. Kweichow Moutai Group, on the other hand, has had a strong financial performance, with abundant cashflow and high solvency. “It is quite common for liquor companies, such as Kweichow Moutai Group, Wuliangye Yibin and Luzhou Lao Jiao, to support the local economies, and in turn receive policy support from the local governments,” Cai from Hefei Zhiqu said. As revealed in a mid-term prospectus filed by Guizhou Expressway last month, the group has two highway projects in construction requiring total investment of 69.4 billion yuan ($10.2 billion), and a little over one-third will be provided by the government. Its planned investment in these projects over the next three years amount to 31.6 billion ($4.6 billion) in total. While many of them are state-owned, they often play important roles in driving local economies. Hit by Covid-19 pandemic, Guizhou Expressway Group incurred a 1.9-billion yuan ($280 million) net loss in the first half of 2020. And as the economy started to reopen in early May, the central government required all highways to waive tolls, so the operator had to give up its main source of revenue. These banks were given licenses to establish investment subsidiaries, so they could hold stakes in SOEs indirectly in a special arrangement. After all, the popularity of the product ensures that it will sell anyway. Moutai’s stock has climbed 45% this year. Loading.. Profit has grown even as overall consumption contracted. (ATF) Hong Kong: Financial markets were in retreat amid a surge in coronavirus cases in the United States, France and …, China's government is reportedly discussing permits for millions of tonnes of additional corn imports over the next year, amid a …, Apple's top iPhone assembler, Taiwan-based Foxconn, has set up a task force to fend off the growing clout of Chinese …, (ATF) China's quick economic recovery has made it the only major economy to post growth in 2020, and the PBoC's …. “This action of Kweichow Moutai Group has no relation with the listed company, and will not affect the production and sales of the Moutai liquor. Funds were put into two local tea companies the following year, while over 100 more projects in liquor, tea, bamboo, and grain businesses were considered for investment support. In 2017, it injected 500 million yuan ($73.4 million) to establish a “Rural Revitalisation and Development Fund” together with Yibin government, as part of a pilot scheme directed by Sichuan Provincial Development and Reform Commission. Kweichow Moutai Group’s core product, a premium baijiu, is dubbed China’s “national liquor” and priced above 2,800 yuan ($410) per bottle in offline retail. Zhao Guofang, a food and beverage industry analyst at Industrial Securities, believes the market has overreacted to the news. This has created a debt-to-asset ratio of about 70% over the last three years. The market reacted negatively to the news, with Kweichow Moutai’s stock price falling 3.16% on September 17 to close at 1,670.5 yuan ($245.60), bringing down the stock prices of similar businesses at the same time. Revenue growth last quarter was backed by strong peak-season demand ahead of the Mid-Autumn festival and National Day holidays that took place in early October. Discover historical prices for 600519.SS stock on Yahoo Finance. Officials also suspect it could be central to new rounds of corruption. Concerned that the surging price of high-end liquor will spur new rounds of corruption, China’s Central Commission for Discipline Inspection published an article on its website this week, warning CPC members against bribery and squandering public funds on holiday banquets. Zhao from Industrial Securities expects Kweichow Moutai Group’s investment in the highway operator to help the group and the listed subsidiary establish a more favourable public image. As an important economic entity in Guizhou Province, Kweichow Moutai Group is more and more becoming a lever to orchestrate the province’s local economy,” Cai Xuefei, a liquor industry consultant and General Manager of Hefei Zhiqu Cultural & Creative, told ATF. This is one of two airports the liquor giant has helped fund. The name has helped the airport raise its profile and in turn increased the liquor company’s influence. 05 2021. This should help Kweichow Moutai to integrate better with the local ecosystem and play an even more important economic role,” he said. S&P 500 Tumbles Most in a Month on Virus Spread: Markets Wrap, Czechs Impose Curfew; Warnings in U.S. Midwest: Virus Update, Bond Defaults Deliver 99% Losses in New Era of U.S. Its net profit margin has remained between 46% to 49% over the last three years. Moutai has emerged as one of China’s most resilient companies during the pandemic. Last year, Moutai also became the first Chinese company since 2005 to see its stock price hit 1,000 yuan (about $145). Have a confidential tip for our reporters? (SHA:600519) : Stock quote, stock chart, quotes, analysis, advice, financials and news for share KWEICHOW MOUTAI CO.,LTD. In December last year, three wholly-owned subsidiaries of Shanghai-listed China Nuclear Engineering & Construction Corp were able to pay off their loans by getting banks to increase their shareholdings. Finally, to obtain the fair value share price of Moutai, we take the market cap (1.1 trillion) divided by the total number of shares outstanding (1.256 trillion). Also in its mid-term note, Guizhou Expressway said highway traffic shrunk to about one-seventh of the normal level in late January to mid-February due to Covid-19 lockdowns. Wuliangye has also been enlisted by local officials to propel business development. People queue for flights at Zunyi Maotai Airport in Guizhou province in February 2020. And last year, Kweichow Moutai Group transferred 4% of its stake in a publicly-listed subsidiary, worth 57 billion yuan ($8.4 billion), at no cost to Guizhou Province Guimin Development Investment Co Ltd, an investment and financing firm owned by Guizhou government. However, the group’s airport businesses has also incurred losses over the last two and a half years, totalling 1.3 billion yuan ($191 million). The bond coupon rate is yet to be decided. This does not leave the authorities with any real motivation to drop the price of Moutai. Because most Moutai liquor orders are prepaid, its cash inflow from operating activities was even higher than revenues – 77.2 billion yuan ($11.3 billion). After sluggish sales in the first quarter (Q1) due to Covid-19 pandemic, Moutai sales began to pick up in Q2 as the virus became contained. These totalled 500 billion yuan ($73.4 billion), according to Wang Hailin, head of the Financial Supervision Department under the State-owned Assets Supervision and Administration Commission (a division of the State Council).

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