(Yicai Global) Oct. 13 -- Most Chinese distillers are expecting to achieve steady growth between January and September, and some are even forecasting double-digit growth, which belies the sector’s poor performance on the stock market.

China’s biggest distiller Kweichow Moutai is predicting profits to soar 19.1 percent in the nine months ended Sept. 30 from the same period last year to CNY44.4 billion (USD6.1 billion), according to its latest earnings prediction. While revenue may jump 16.5 percent to CNY89.8 billion (USD12.5 billion).

Other makers of China’s favorite tipple, baijiu, which is a fiery clear grain liquor known for its high alcohol content, also started to release their earnings forecasts for the first nine months yesterday. Shanxi Xinghuacun Fen Wine Factory is projecting a 42 percent jump in profit year on year to CNY7 billion (USD975.1 million) and a 28 percent surge in revenue to CNY22.1 billion (USD3.1 billion). Jiangsu King’s Luck Brewery Joint-Stock, Sichuan Swellfun and Hebei Hengshui Laobaigan Liquor too are anticipating huge growth.

And in the first half, 16 out of China’s 19 listed liquor makers achieved double-digit growth. The 19 firms logged a combined revenue of CNY183.2 billion (USD25.5 billion), a gain of 16.8 percent year on year, according to the latest statistics.

But despite the optimism, 17 of them have seen their stock prices slump since the beginning of the year, and 10 of them have lost more than 20 percent in value, according to financial data provider Wind.

Judging from the distillers’ predictions, the languishing share price is unfounded and stock prices should start to recover soon, Yan Kaiwen, chief strategy analyst with China Fortune Securities, told Yicai Global.

“The good performance of the Baijiu sector during the first three quarters will support stock prices,” Yan said. “The core driver of a company’s share price lies in whether profit can continue to improve or not.”

But stocks in the consumer staples sector, which includes alcohol, have continued their downward trajectory afer the week-long National Day holiday ended on Oct. 7, due to market rumors and the ongoing fallout from Covid-19 outbreaks. Kweichow Moutai, Wuliangye, Shanxi Xinghuacun Fen Wine Factory and other distillers all slid in the three trading days after the holiday.

The liquor sector is now at a low, but it will experience a comeback as the macroeconomic environment improves, TF Securities said.

Editors: Shi Yi, Kim Taylor