(Yicai Global) Nov. 29 -- Shares of Kweichow Moutai surged after the major Chinese baijiu distiller, whose equity price has slumped this year, revealed a CNY27.5 billion (USD3.8 billion) special cash dividend scheme and an up to CNY3.1 billion (USD433 million) buyback plan of the controlling shareholder.

Moutai's stock price [SHA: 600519] jumped 5.2 percent to CNY1,594.78 (USD223) as of 2.14 p.m., after rallying as much as 6 percent intraday. 

Since a record high in February 2021, Moutai's share price has dropped almost 40 percent amid slowing economic growth and worries about how the Covid-19 pandemic affects consumption. The stock used to be a must-have in Chinese fund managers’ portfolios due to its strong performance. 

The liquor retailer will distribute special cash dividends of CNY21.91 (USD3) per share before tax, or CNY27.5 billion in total to all shareholders, the Zunyi-based firm announced yesterday.

This is Moutai’s first special cash dividend scheme in 21 years since going public. It usually pays dividends after its annual financial report is released in the middle of the year. In June, the company already announced a CNY27.2 billion payout plan.

The firm that makes liquor out of sorghum had more news to share. Within six months of the dividend transfer, Moutai's biggest shareholder will use from CNY1.5 billion to CNY3.1 billion to increase its stake in the company.

In the context of Moutai's sluggish capital market performance and that of the baijiu industry, the two plans aim to lend confidence to the market which has been under pressure for the past two years, Xiao Zhuqing, a baijiu industry expert, told Yicai Global.

Editor: Emmi Laine, Xiao Yi