Previously, the company decided to invest in the implementation of the fifth phase of the "Eleventh Five-Year Plan" 10,000-ton Maotai liquor project, which involves a technical renovation project for 2,000 tons of Maotai liquor to increase production capacity by 2,000 tons. The total investment in this project is approximately 5.67 billion yuan. "Therefore, for Kweichow Maotai, on one hand, the 10,000-ton Maotai liquor capacity expansion project is providing capacity assurance, while on the other hand, price increases will favorably boost its profits," said an industry insider.
Compared with general liquor companies, Kweichow Maotai's price increase may have greater significance. A market analyst told the reporter: "Currently, Kweichow Maotai is still in a stage of severe supply shortage, and the company is currently expanding its production capacity on a large scale. Therefore, Maotai’s price increase will significantly enhance the company's performance."
Kweichow Maotai announced that prices will be increased by 13% starting from next year. In fact, under the expectation of price increases in the liquor industry, the recent performance of the liquor sector has been much better than the overall market. Since November, many liquor stocks have continuously hit new short-term highs. Taking advantage of the recent rise in consumer-related stocks, the liquor sector has been exceptionally active. The market seems to favor the theme of liquor price increases. Stocks like Swellfun and Luzhou Laojiao, which raised prices earlier, have shown very active trading before and after their price adjustments. Luzhou Laojiao's stock price has risen by 30% since November, while Swellfun's stock price has also increased by 30-40% in the past month or so. "Not only these companies that have already raised prices, but actually some liquor companies that have not yet raised prices are likely to have expectations of price increases in the near future."
Just as the outside world almost unanimously expects liquor prices to rise, Kweichow Maotai announced today that due to factors such as rising raw material costs, market supply and demand conditions, and corporate development strategy needs, the company has decided to appropriately increase the ex-factory price of Maotai liquor starting from January 1, 2010. The average increase will be about 13%. The company believes that this price adjustment will have a certain impact on the company's operating performance in 2010.
Before this, many well-known brands in the liquor industry had already started raising prices. It is reported that Luzhou Laojiao, Swellfun, and other companies have successively increased their product prices. In fact, the outside world has long expected Maotai to raise prices. As early as October this year, food and beverage industry researchers Teng Wenfei from Shanghai Securities and Luo Yin from Shanxi Securities both expressed that Kweichow Maotai's price increase in the fourth quarter of this year was worth looking forward to. Researcher Wenxian from Ping An Securities believed that the pressure on Kweichow Maotai's performance growth in 2010 might force Maotai liquor to raise prices. Kweichow Maotai's price increase finally came as expected, just slightly later than they anticipated, extending into the post-New Year period. Given the upcoming Spring Festival consumption peak, liquor sales have gradually entered a favorable season. This round of Maotai price increases continues the industry trend of seasonal price hikes during peak seasons.
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