(Yicai Global) July 18 -- Net profit at China's biggest distiller Kweichow Moutai surged 26.6 percent to nearly CNY20 billion in the first half despite setbacks in the second quarter.

First-half revenue was up 18.2 percent at CNY39.5 billion, the Guizhou province-based firm said in its earnings report yesterday, but net profit in the second quarter grew just 20.3 percent to CNY8.7 billion, less than half as fast as the 41.5 percent surge in the same period a year earlier.

Guosen Securities reckons the slowdown is a result of changes to Moutai's channel system and uncertainties with its shipment and confirmation process, but expects there should be no long term woes.

The company lost 593 less domestic distributors in the first half of this year, with 492 of those specializing in sauce aroma baijiu, Moutai's specialty product with a year-long fermentation process. It brought in 21 new dealers to have 2,415 in China and 115 overseas by the end of June.

Essence Securities' Su Cheng agrees that there should be no long-term dampeners, and believes the company can achieve its CNY100 billion revenue target this year. The second half of the year is typically peak season for drinks like baijiu as there are important events and festivals, she said.

Moutai's share price [SHA:600519] has been on a tear for the past five years, becoming the first to pass CNY1,000 (USD145.5) since the year 2000 late last month. Its stock was down 0.47 percent at CNY958.99 as of 10.02 a.m. today.

Editor: James Boynton