Halister News

(Bloomberg) -- Kweichow Moutai Co. shares jumped the most since August 2015 after the distiller’s third-quarter earnings surged more than 130% from a year earlier, prompting Credit Suisse to say the strong results could help a broader rally in consumer stocks.

• Moutai rises as much as 8.4% in Shanghai; +6.5% at 602.44 yuan as of 10:48am
• Co.’s top-line and bottom-line growth both easily beat market expectations, with positive surprise mainly coming from strong volume growth in premium products, Credit Suisse analyst Li Chen writes in Oct. 26 note
• Reserved about high-end volume growth in 2018, but doesn’t rule out possibility that Moutai may continue to exhaust inventory if supply shortage continues: Chen; co. took from inventory in 3Q to ease supply shortage and cool overheated prices
• “Huge positive” surprise in Moutai earnings could trigger investor interest in consumer goods and there will likely be a rally, Chen says
• NOTE: CSI 300 Consumer Staples Index rises 4.7%, most since December 2015
• Goldman Sachs raises price target on Moutai by 9.2% to 648.42 yuan and maintains buy rating; lifts 2017-2021 EPS ests. by up to 10% on higher volume and selling prices
• HSBC also reiterates buy rating and raises PT by 27% to 720 yuan
• Moutai has 27 buy ratings, two holds and zero sell recommendations among analysts tracked by Bloomberg

To contact the reporter on this story: Will Davies in Hong Kong at wdavies13@bloomberg.net To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net Ron Harui, Will Davies