Casinos, booze and watches: China's vice stocks are back

HONG KONG (April 10): Industries that suffered under President Xi Jinping’s anti-corruption campaign are thriving again.

Shares of Macau casino operators have clawed their way back to the highest level since August 2015 as VIP takings recover. Makers of pricey spirits, which became a symbol for official excess, are trading near multi-year highs. Even Chinese imports of Swiss watches are looking buoyant, jumping 28% in December alone, as demand rebuilds in the wake of the Communist Party’s crackdown on conspicuous spending.

Much of the investor confidence can be attributed to the success of industry efforts to target the mass market, rather than relying on a cashed-up elite. Casinos shifted to courting tourists and building family-friendly facilities in Macau. Kweichow Moutai Co.cut prices of its premium liquor to make it more affordable, an approach emulated by Swatch Group AG, which introduced more economical models. Bolstering their outlook is a perception that Xi’s campaign is losing its immediacy, according to Sun Hung Kai Financial Ltd.

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