Does Kweichow Moutai’s major shareholders’ buying signal end to the nasty hangover after US$152 billion sell-off?

Kweichow Moutai, the world’s most valuable liquor company, is slowly returning to investors’ radars with buying interest returning after a bruising trillion yuan sell-off.

Controlling shareholder China Kweichow Moutai Winery Group spent 1.676 billion yuan (US$231.7 million) buying back 919,621 shares of its listed unit over the past six months, while an affiliate Kweichow Moutai Distillery Group Technology Development bought back 37,600 shares for 69 million yuan in the span, Kweichow Moutai said in a statement to the Shanghai exchange on Wednesday.

The combined purchase of 1.75 billion yuan increased Kweichow Moutai Winery’s stake in the listed company to 54.1 per cent and that of Kweichow Moutai Distillery to 2.2 per cent.

The stock repurchase came after Kweichow said in November that its major shareholder and its affiliate would use part of a special dividend payout to buy back a maximum of 3.1 billion yuan worth of its stocks. It is the fourth buy-back conducted by Kweichow Moutai’s controlling shareholder following repurchases in 2011, 2013 and 2014.

“The repurchase was a display of the confidence in the company’s growth outlook, recognition of the long-term investment value and support to the long-term stable and healthy development,” the company said in a statement.

Baiju is a traditional fiery tipple with a 5,000-year history and is among the world’s most consumed liquor, although it very little finds its way outside China. Earlier in the year, investors were worried about its demand outlook mainly on market concerns over the macro environment and the consumption recovery, plunging the 600 billion yuan industry into crisis with its nearly 1,000 players scrambling to cut costs amid difficult business conditions.