By the end of 2020, Kweichow Maotai had achieved an annual revenue of around CNY 114.041 billion, a YoY increase of 13.7%. The net profit accounted for CNY 54.372 billion, a YoY increase of 18.2%.
According to Guizhou’s 2020 national economic and social development report – released on February 27, 2020 – Kweichow Maotai’s annual revenue exceeded its original goal of CNY 110 billion, reaching a net profit of CNY 50.0 billion in 2020. The actual company’s annual revenue and net profit both increased by over 10% year-over-year.
Kweichow Maotai is a liquor company selling the most popular alcoholic drink – known as Baijiu – in China. This distilled liquor is a traditional Chinese spirit that resembles Vodka in the production method and alcohol level by volume. The company released a prospectus claiming that it would meet the expectations of heightening annual revenue, accounting for CNY 97.7 billion, with a YoY increase of 10% by 2020. Also, the net profit would break a record of CNY 45.5 billion attributable to shareholders with the same increased YoY rate.
Although Maotai is a billion-dollar business, its growth rate has been declining and can hardly compare to a few years ago.
Specifically, Maotai’s growth rate had been soaring since 2014. In 2017, its annual revenue and net profit had increased rates of 49.81% and 61.97%, respectively. This growth trend continued to 2018, when its annual revenue and net profit still maintained increased rates of 26.49% and 30.00%.
The turning point happened a year later, when the growth rate dramatically slowed down. In 2019, Kweichow Maotai’s annual revenue growth rate plummeted to 16.01%, with a decreased net profit growth rate of 17.05%.
However, this reigning giant in the China spirits market remained steady during the pandemic. In the first half of 2020, Maotai launched IPOs for 19 subsidiaries with an annual revenue of CNY 135.092 billion and a net profit of CNY 48.905 billion, a YoY increase of 7.42%.
Regarding future development, Kweichow Maotai has aimed to strengthen its leading position in the China spirits market by expanding productions in Baijiu, a traditional Chinese liquor. The company attempts to promote the Baijiu industry by refining processes from extracting raw materials to fermentation and distillation.