SHARES of Kweichow Moutai Co. jumped after the liquor maker said it will raise the ex-factory prices of its signature alcoholic drinks for the first time in six years.

Its Shanghai-listed shares closed up 5.72% at 1,780.99 yuan (US$243.28) after jumping as much as 9.82% at the open. The distiller said late Tuesday it would increase factory-gate prices by 20% for a number of its flagship baijiu drinks, the high-alcohol content sorghum-based liquor of choice for banquets in the country.

The decision to raise ex-factory prices came after repeated calls to do so from investors, and exceeds the average 18% hike the company announced across its product line six years ago.

Recommended retail prices for its liquor range will remain the same, the company said, adding the move will have “some impact” on its earnings.

The announcement is “a positive signal and a potential change to the narrative on the Moutai investment story,” Goldman Sachs Group Inc. analysts wrote in a note.

The move should ease concerns on the commercialization orientation of Moutai, and temper concerns on its growth driver in 2024, they said.

Analysts called the price hike timely, given that weak consumer prices mean inflation is unlikely to be a concern, even if the move triggers other liquor makers and consumer firms to follow suit. (SD-Agencies)