(Yicai Global) Oct. 24 -- Chinese liquor stocks fell further today, following last week’s declines, with top brand Kweichow Moutai closing down 7.6 percent despite strong third quarter trading results. Analysts believe the decline may be the result of a drop in alcohol and tobacco sales last month.

Net profit at Kweichow Moutai jumped 16 percent to CNY14.61 billion (USD2.02 billion) in the three months ended Sept. 30 from a year earlier, the Guizhou province-based company said on Oct. 16. And even though the gain was also greater than in the same quarter of last year, its stock price [SHA:600519] has sunk nearly 20 percent in the past two weeks.

Luzhou Laojiao [SHE:000568] closed down 7.3 percent today, while Shanxi Fenjiu [SHA:600809] slumped 8.9 percent.

Luzhou Laojiao said it expected an increase in profit of 23 percent to 33 percent in the third quarter, and Shanxi Fenjiu said revenue and profit are expected to climb 32 percent and 44 percent from a year ago, slightly more than in the first half.

But according to data released today by the National Bureau of Statistics, in September, retail sales of tobacco and alcohol were CNY46.5 billion (USD6.41 billion), falling 8.8 percent a year ago. In the first nine months of this year, sales rose 4.7 percent.

Fluctuations in liquor stocks might be related to the withdrawal of funds and unsteadiness in overseas markets, while today’s decline may be related to the macro data, according to Shen Meng, executive director of Chanson International Holding.

Private equity investors who have been following the liquor industry for a long time told Yicai Global that the current market demand is insufficient, and the sector has entered a period of decline. High liquor company valuations are also a factor and even Kweichow Moutai cannot escape the trend, they said.

Editor: Tom Litting