Nikkei Asia reported on December 24, 2020, that Moutai (aka Maotai) Liquor, one of China’s most famous baijiu, a 100 proof distilled spirit made of wheat and sorghum, often appears on the gift list of wealthy individuals, and sometimes of corrupt officials. In 2020, the State-owned Assets Supervision and Administration Commission of Guizhou province, a government body responsible for managing state-owned enterprises and also a 100 per cent owner of the parent company of Kweichow Moutai, ordered the liquor producer to present a pricey holiday gift to the government of its home province — 4 per cent of Moutai’s outstanding stock, or 50.24 million shares worth 91.95 billion yuan ($14.08 billion) at the December 24 closing price of 1,830.34 yuan. The recipient is Guizhou Province State-owned Asset Operation, which undertakes large government investments and infrastructure projects. After the event, the stake held by the parent company of the sorghum-based baijiu hard liquor producer declined to 54 percent, while Guizhou Province State-owned Asset Operation, together with its parent company Guizhou Financial Holding Group, held up to 4.9 percent of Moutai’s shares. When interviewed by Nikkei Asia, Andrew Collier, Managing Director at Orient Capital Research in Hong Kong said, “China is increasingly asking its firms that are the most successful financially to contribute to state coffers.”  “Moutai has been wildly successful and has probably drawn some attention for its success, particularly as its home province is one of the poorest in China.” One year ago, the parent of Kweichow Moutai also granted an equal number of shares to the same investment vehicle of the Guizhou government. The body kept those shares until Moutai issued its annual dividend in June but has since sold more than 80 per cent of the grant. Between the share sales and the dividend, the agency pocketed around 72 billion yuan ($11 billion). Kweichow Moutai has been one of the best performers on the Chinese stock market. Its market value stands around 2.3 trillion yuan ($400 billion), with a net profit of 44 billion yuan ($6.7 billion) at the end of 2019.

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