Distillers in high spirits after heady Q1

Sales and profits of China's spirit makers are likely to soar in the first quarter, and industry analysts expect such rapid growth to sustain as higher-end products are becoming popular on the back of the consumption upgrade in the country.

For instance, Luzhou, Sichuan province-based Luzhou Laojiao Group, a Chinese liquor producer, expects first-quarter profit to come in between 1.2 billion yuan ($191 million) and 1.28 billion yuan, which would be 50 to 60 percent up year-on-year.

The company, which distilling the country's first "thick fragrance" spirit, said total sales revenue is likely to increase more than 25 percent year-on-year, mainly driven by growth in sales of high-end products.

Shenwan Hongyuan Securities said considering the added consumption tax levied on the suppliers, the sales growth of more than 30 percent is remarkable for liquor makers.

For Luzhou Laojiao, brisk sales of its signature product, the National Cellar 1573, a group of brewing pits first established in 1573, have been driving overall sales growth.

Meanwhile, Jiangsu King's Luck Brewery Joint-stock Co Ltd's first-quarter sales revenue reached 2.95 billion yuan last year, up almost 16 percent year-on-year. Its net profit rose 18 percent year-on-year to 896 million yuan.

The company said the product structure of white spirits has changed with top-end liquors becoming popular. In the first quarter, liquors priced more than 300 yuan net-ted 707 million yuan, up 68 percent year-on-year, accounting for nearly half of the company's total revenue.

Products priced less than 100 yuan brought in 240 million yuan, down 13 percent year-on-year, Lucky Brewery said.

Wuliangye Yibin Co Ltd said it sold 6,000 metric tons of its liquor across product categories in the first quarter, higher than what it sold in the past few years on a quarterly basis.

New products stood out by posting higher sales. Wuliangye said it is distilling more top-end products to meet the demand for them.

Jiugui Liquor Co Ltd said it expected its first-quarter profit to reach 60 million yuan to 65 million yuan, up 62 percent to 75 percent year-on-year.

Hua Chuang Securities said the main products of Jiugui Liquor are priced between 300 yuan and 600 yuan. Sales revenue from products in this price range increased also because their prices rose.

Fenjiu Group said it expected its first-quarter profit to rise 50 to 60 percent year-on-year, or by 234 million yuan to 281 million yuan, to 390 million yuan to 456 million yuan.