Kweichow Moutai and G-bits compete to be priciest Chinese stock
March 27, 2017 Category Stock Markets, Weekly
Liquor supplier Kweichow Moutai and gaming service provider G-bits Network Technology are vying to become the most expensive stocks on China’s equity markets. After being briefly unseated by G-bits during intraday trading on March 14, Kweichow Moutai has regained its lead as the priciest stock on the Shanghai and Shenzhen stock exchanges. The two stocks are the only ones trading above CNY300 among China’s 3,100-plus publicly-traded companies. Investors seem to favor Moutai due to the strong and growing demand for its products. Alexandre Werno, Executive Vice General Manager of Fortune SG Fund Management Co, says Moutai has solid fundamental support for its stock price, while the share-price gain of G-bits – which debuted on the Shanghai exchange on January 4 – is mostly the result of speculative buying of new listings, which are often subject to manipulation, due to their small proportions of free-floating shares. “Moutai will hold the title of the country’s most-expensive stock for the foreseeable future,” he said. “Sales are quite stable these days. Demand is always higher than supply. Therefore Moutai has the power to increase its retail price. This has driven the stock price higher.” The Chinese liquor distilled from sorghum is gaining favor among retail consumers, thanks to rising incomes, rather than public spending by government officials, the South China Morning Post reports. Kweichow Moutai expects first-quarter profit to rise 16% from a year earlier, accelerating from a 7.4% increase for the whole year of 2016.
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