(Yicai Global) July 17 -- Chinese high-end liquor maker Kweichow Moutai made encouraging profits during the first six months this year on strengthening demand, according to estimates that the firm released yesterday.

Kweichow Moutai's revenue increased 37 percent to CNY35 billion (USD5.2 billion) in the first half of this year, the liquor maker said in a meeting on held on July 14-15. Profits rose about 40 percent, without specification on the worth and type, but last year the Guizhou province-based firm made CNY16.1 billion in profits in the six-month period.

Market reaction to Moutai's liquor products was in line with expectations in the first half, General Manager Li Baofang said, adding that Moutai's current bottleneck is the robust market demand matched with insufficient production capacity. The company needs to accelerate the expansion of its liquor projects so that new production will come to the market soon, he added.

The liquor sector is anticipating two Chinese national holidays of the Mid-Autumn Festival in September and National Day in October, and many are already increasing prices. Reports say that some distillers also control their supplies to entice price hikes.

Moutai liquor has been out of stock recently and supplies have been tight, a dealer told Yicai Global, adding that a bottle sells for about CNY1,700 (USD255).

Moutai is unlikely to lift prices again as it fears people will object, Cai Xuefei, a senior baijiu industry analyst said, adding that market demand for the firm's products is huge right now.

The company is poised to achieve CNY90 billion in revenues this year and CNY100 billion next year, with good foundations in all aspects, Li said.

Moutai traded 2 percentage points lower to the opening price at CNY738.8 at 2.12 p.m. today Beijing time.

The firm will officially release its half-year report on Aug. 2.

Editor: Emmi Laine