(Yicai) April 3 -- Kweichow Moutai, the Chinese distiller known for its premium baijiu liquor, is forecasting single-digit growth in annual revenue for the first time in eight years, citing a slowdown in the industry.

The Guizhou-based liquor giant expects revenue to grow by just 9 percent this year, according to its annual earnings report released yesterday. This marks the first time since 2022 that Moutai has lowered its sales growth target, after forecasting 15 percent annual increases in previous years. Last year, revenue rose 16 percent to CNY174.1 billion (USD23.8 billion).

Investors accepted the modest outlook. Moutai’s stock price [SHA: 600519] climbed 1.3 percent to close at CNY1,568.88 (USD215.90) in Shanghai today, giving it a market capitalization of about CNY1.95 trillion (USD267 billion). The shares have fallen 8.5 percent in value over the past 12 months.

Even though China’s liquor industry is experiencing the dual effects of its own adjustments and the economic cycle, Moutai said the positive factors outweigh the negative ones, and the overall growth trajectory remains strong.

Production at China’s big distillers fell 2 percent in 2024 from the year before to about 4.1 million kiloliters, according to the National Bureau of Statistics.

Moutai’s net profit rose 15 percent to CNY86.2 billion (USD11.8 billion) in the year ended Dec. 31, partly driven by price increases, its earnings report showed. In late 2023, the firm hiked prices for the first time in six years, increasing the average ex-factory price of its flagship 53 percent alcohol by volume Kweichow Moutai liquor by around 20 percent to CNY1,169 (USD160) per bottle.

The firm produced 56,300 tons of baijiu last year, a 2 percent decline, while sales volume grew 10 percent to 46,400 tons. Series liquors  -- budget sub-brands such as Moutai Yingbin, Moutai Prince, and Moutai 1935 -- accounted for 85 percent of total output, reaching 48,100 tons, up by 12 percent. Such sales rose 19 percent to 36,900 tons.

Moutai’s domestic sales totaled CNY165.4 billion, a 16 percent year-on-year increase, while overseas revenue surpassed CNY5 billion for the first time, rising 19 percent to CNY5.2 billion.

Baijiu is made from sorghum and other grains such as wheat, barley, or rice and is known for its high alcohol content, which can range from 40 percent to 65 percent alcohol by volume or even higher. It is most often consumed at social gatherings, banquets, and celebrations.

Moutai proposed to pay a cash dividend for last year of CNY276.24 (USD38) per 10 shares, totaling CNY34.7 billion. It also plans to invest CNY4.7 billion (USD640 million) in fixed assets this year.

Editor: Emmi Laine