Penfolds-Maker Treasury Soars to Record on China-Led Profit

  • Winemaker's shares surge 17 percent in Sydney trading
  • Profit in second half of 2015 beat analysts' forecasts

Treasury Wine Estates Ltd., owner of the Penfolds and Wolf Blass brands, surged 17 percent to a record in Sydney trading after demand from China helped deliver higher-than-expected earnings.

Operating profit in the second half of 2015 was between A$140 million ($98 million) and A$150 million, above the average analyst estimate of about A$120 million, the Melbourne-based company said after the market closed Thursday. 

Wine Australia said this week that the country’s shipments to China in 2015 rose faster than anywhere worldwide, surging 66 percent to A$370 million. Treasury is betting on China’s thirst for luxury brands and unveiled last year’s range of Penfolds wines in Shanghai, the collection’s first launch outside Australia.

“Our Asia business performance is particularly pleasing,” Chief Executive Officer Michael Clarke said in the statement. “We benefited from increased shipments to the region ahead of Chinese New Year in February.”

The stock jumped to A$9.28 at the local close, the highest level since Treasury listed in May 2011. The leap takes Treasury’s market value to A$6.8 billion.

Already the world’s biggest consumers of red wine, Chinese drinkers often turn to expensive, famous labels to avoid any embarrassment, Simon Marton, Treasury’s chief marketing officer, said in October. The 2015 Penfolds collection included the 2011 Grange for A$785 a bottle.

Treasury has said Asia will become its biggest profit driver as soon as this year.

The company will report full results for the six months ended Dec. 31 on Feb. 18.

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