(Yicai) April 3 -- Chinese liquor giant Kweichow Moutai logged a 19.2 percent surge in net profit in 2023 from the previous year, higher than the previously estimated 17.2 percent, thanks to rising sales through direct channels, and in particular its online sales platform.

Kweichow Moutai raked in CNY74.7 billion (USD10.3 billion) of net profit last year, the Zunyi-based company said in its latest financial report. Revenue soared 18 percent to CNY150.6 billion (USD20.8 billion).

Most of Kweichow Moutai’s revenue comes from its Moutai alcohol, accounting for 84 percent of total revenue. Revenue from this fiery rice wine, which has an alcohol content of 53 percent, surged 17.4 percent last year from the year before to CNY126.6 billion (USD17.5 billion).

However the gross profit margin of this liquor narrowed for the first time since 2018, shrinking 0.07 percent to 94.1 percent. The company hiked Moutai’s price by 20 percent in November last year, higher than the market expectations.

Revenue from other types of spirits soared 29.4 percent over the period to CNY20.6 billion (USD2.9 billion) and the gross profit margin expanded 2.5 percent to 79.8 percent, the report said.

Sales through wholesale and reseller channels jumped 7.5 percent to CNY80 billion (USD11.1 billion) with a gross profit margin of 89.3 percent, while that from direct sales surged 36.2 percent to CNY67.2 billion, with a gross profit margin of 95.5 percent.

Sales through its “iMoutai” online marketing platform, one of its direct sales channels, did particularly well, with revenue expanding 88.3 percent to CNY22.4 billion (USD3 billion), the report said.

Expenses, though, soared 40.9 percent in 2023 from a year earlier to CNY4.7 billion (USD642.7 million), largely due to extra spending on advertising and market expansion, it said. By comparison, expenditure expanded 20.5 percent in 2022.

Kweichow Moutai aims to increase revenue by around 15 percent this year from last year and will complete fixed-asset investment worth about CNY6.2 billion (USD854.2 million).

Kweichow Moutai’s share price [SHA:600519] closed up 0.07 percent at CNY1,715.40 (USD237) today.

Editor: Kim Taylor