Media365
The majority shareholder of Shenzhen-listed Wuliangye Yibin (Wuliangye) – China’s iconic premium baijiu producer – plans to increase its equity stake in the listed unit by purchasing between 3 billion yuan (US$441 million) and 5 billion yuan worth of shares over the next six months, in a move aimed at bolstering investor confidence after the stock slid to a six-year low.
Analysts said the stake increase followed a prolonged downturn in China’s baijiu sector and growing unease among investors after the company overhauled its accounting treatment, which sharply reduced reported earnings.
The Sichuan-based distiller, the country’s second-largest baijiu maker by revenue and brand value behind Kweichow Moutai, said in a statement on Wednesday that its parent company remained confident in Wuliangye’s long-term prospects and intrinsic value.
State-owned Yibin Development Holding owns 34.43 per cent of Wuliangye’s shares, while its wholly owned subsidiary, Sichuan Yibin Wuliangye Group, holds a 20.65 per cent stake in the listed unit.
Under the plan, Sichuan Yibin Wuliangye Group will increase its stake over the next six months using internal funds. The company had not set a purchase price and will gradually acquire shares on the open market, according to the filing.
Shares in Shenzhen-listed Wuliangye rose 0.37 per cent to 92.60 yuan on Thursday. However, the stock has still fallen 12.6 per cent so far this year, lagging many of its baijiu peers and the broader market.
