(Yicai) Sept. 13 -- Kweichow Moutai’s market cap has halved since reaching a record high more than three and a half years ago, reflecting investor concerns about weak demand for the Chinese liquor giant’s flagship product and uncertainties around the firm's transformation and broader market outlook.

Shares of Kweichow Moutai [SHA: 600519] briefly fell below CNY1,300 (USD183.30) in trading today, half of the CNY2,627.88 notched on Feb. 18, 2021. The stock ended today 2.3 percent lower at CNY1304.13, giving the firm a market value of CNY1.64 trillion (USD231 billion).

Kweichow Moutai’s traditional key consumers were wealthy clients in real estate, infrastructure, and finance, and these sectors are undergoing much change, Xiao Zhuqing, an independent liquor analyst, told Yicai.

The Guizhou-based company has come up with a transformation plan to deal with the new market situation, but the drop in the stock price reflects investor concerns about how long this will take and what the results will be, Xiao noted.

Investors are worried about the liquor market, which is weighing on the stock prices of various firms, according to Shen Meng, executive director of Chanson Capital.

Many liquor vendors have expressed concern about alcohol consumption over China’s fast-approaching Mid-Autumn Festival, noting that demand for Moutai, among other products, is lower than in previous years.

Due to oversupply, consumption falling short of expectations, and concerns about future price fluctuations, the cost of Feitian Moutai, Kweichow Moutai’s main product, has continued to decline. According to one third-party quotation platform, Feitian Moutai is CNY2,535 per bottle now, down about CNY145 (USD20.4) on August.

The company said at a recent earnings meeting that the market is stable and the aim is to increase total turnover by 15 percent from last year. It also reported a 16 percent jump in first-half profit on an 18 percent increase in revenue to CNY81.9 billion (USD11.4 billion).

Editor: Tom Litting