KWEICHOW Moutai Co., whose premium, fiery liquor “baijiu” has been hit by a fierce luxury crackdown in China, beat market estimates to dodge its weakest ever profit growth Tuesday.

    China’s top baijiu maker saw 2013 net profit rise 13.7 percent to 15.1 billion yuan (US$2.43 billion), above market estimates of 14.6 billion yuan, though a sharp drop from 52 percent growth last year and the second slowest since listing as it grappled with a slower economy and government-led crackdown.

    But Moutai has seen its stock rebound by a third this year, far outpacing the wider Shanghai index, as it shows its ability to maintain sales and profit growth despite facing its “most difficult year.”

    But despite cut-price deals and online tie-ups that have begun to win back investors, the shares are still down by close to 40 percent since China launched the crackdown in 2012.

    The fate of high-end baijiu, a potent white liquor that outsells vodka worldwide, reflects the wider challenge for luxury brands in China as they seek to adapt to slower growth and price-sensitive shoppers increasingly looking downmarket.

    “There’s not going to be the same growth as before, but people feel that it’s reached a bottom,” said Torsten Stocker, a partner at consultancy firm A.T. Kearney, adding Moutai’s iconic name in China would help it muscle out rivals.

    The anti-luxury drive saw Moutai’s profit margin squeezed to 48.95 percent from 50.30 percent in 2012, reflecting increasing costs as high-end baijiu makers are forced to take a more proactive approach to marketing and sales, analysts said.

    Close rival Wuliangye Yibin Co. posted a 20 percent loss earlier this month, its biggest drop since 2002, though its earnings could see a bounce from the third quarter of this year, according to Hong Yuan Securities. (SD-Agencies)