Kweichow Moutai Co Ltd's net profit in the first half of 2012 surged 42.56 percent to 7 billion yuan ($1.1 billion) year-on-year, according to the company's semiannual financial report on Aug 10.

The company's high profit growth led Morgan Stanley & Co International PLC to increase its stake in Moutai, making Morgan Stanley the sixth-largest Moutai shareholder, according to the report.

Despite the company's strong semiannual report, Moutai listed six difficulties in its operation.

The first difficulty for the company is that the competition in China's high-end liquor market is stiffer.

Moutai applied for the trademark of "Guojiu Maotai", or "Moutai the national liquor", and got through the authority's first examination on July 20. The application is opposed by other liquor manufacturers. Some of the well-known liquor makers have already sent their notices of opposition to the Trademark Office of the State Administration for Industry and Commerce.

The fake products, environment pollution in the liquor's production area and the slowdown of economic growth in China also affected the company's business in 2012.

Kweichow Moutai Co Ltd's business operation

Moutai retail chain launched
Moutai fails to disclose sales info
Moutai chairman refutes fake liquor reports
Moutai nets over 8.7b yuan in 2011
National liquor Moutai sees output up 14%

Kweichow Moutai brand

Moutai tops China's liquor brand list
Moutai and the lure of a luxury product label
Moutai's status provides a headache