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Kweichow Moutai surpasses Shenzhen economy as meteoric rise sparks bubble concerns in China’s stock

China’s biggest liquor distiller Kweichow Moutai surpassed the nation’s biggest lender last year when its stock surged to an all-time high. With some analysts overwhelmingly bullish on its earnings power, the company is set to eclipse the size of Shenzhen’s economy later this year.

The stock rose 2.9 per cent to a record of 2,160.90 yuan at the close on Tuesday. It has risen 8.2 per cent in the new year, enhancing its ranking as the world’s most valuable liquor producer at 2.71 trillion yuan (US$419.1 billion). The Shanghai Composite Index has risen 3.9 per cent since December 31.

That capitalisation has already exceeded Shenzhen’s gross domestic product (GDP) of 2.69 trillion yuan in 2019. If some of the more bullish analysts are right, the maker of Mao Zedong’s favourite tipple will, at some point this year, be larger than the GDP of Shenzhen, the richest of 11 cities within the Greater Bay Area.

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