Chinese Liquor Giant Moutai shares recorded their biggest jump since April 2015 after the new chairman pledged long-term reforms, lifting optimism on its growth outlook. The company’s stock closed 9.5% higher nearly $32 billion to its market value and contributed more than half of the point gains in the benchmark CSI 300 Index.
Other liquor producers also rose, pushing a subgauge of the consumer staples sector up by 7.4%, its best day in more than six years. The consumer staple subgauge of the CSI 300 index was still down 30% from a February high despite Monday’s spike, the worst among all sectors.Reforms including distribution channel changes and pricing pledged by Chinese Liquor Giant Moutai new Chairman Ding Xiongjun during a Friday shareholders’ meeting. This is assumed to lift the prospects of higher selling prices as well as volumes, Sinolink Securities Co. analysts including Liu Chenqian wrote in a note. They expected a speed rise in earnings next year.
According to a statement posted on the company’s official WeChat account,Ding said Moutai will focus on its main business and push for reforms in corporate governance, asset management as well as marketing and pricing systems. The rebound in liquor stocks follows months of selloffs due to high valuations as investors rotated into other sectors such as energy and utilities. The CSI 300 Index finished Monday 0.6% higher, with more than half of the 10 top performers being alcohol producers.
In Hong Kong, shares tied to cryptocurrencies also trended lower after China banned transactions and vowed to root out the mining of digital assets. Huobi Technology Holdings, which started one of the world’s largest Bitcoin exchanges about seven years ago, sank as much as 33%, the most ever.