UOB Kay Hian
Date of Report: Wednesday, 13 August 2025
Kweichow Moutai 2Q25 Review: Steady Growth Amid Wholesale Price Pressures, Full-Year Targets Within Reach
Introduction
Kweichow Moutai, the iconic Chinese liquor producer, continues to demonstrate its market dominance with robust first-half 2025 results, even as wholesale price pressures loom due to ongoing anti-extravagance policies in China. UOB Kay Hian maintains its BUY rating with a target price of RMB 1,722, implying a 19.8% upside from the current share price.
Stock Overview and Market Performance
- Share Price: RMB 1,437.04
- Target Price: RMB 1,722.00
- Upside Potential: +19.8%
- GICS Sector: Consumer Staples
- Bloomberg Ticker: 600519 CH
- Shares Issued: 1,256.2 million
- Market Cap: RMB 1,805,206.5 million (USD 251.2 billion)
- 52-Week High/Low: RMB 1,910.00 / RMB 1,245.83
- Major Shareholders: Kweichow Moutai Group (54.07%), Guizhou Province State-owned Capital Operation Co., Ltd. (4.54%)
- FY25 NAV/Share: RMB 206.69
- FY25 Net Cash/Share: RMB 187.45
1H25 Performance: Revenue and Profit Growth On Track
- Total 1H25 Revenue: RMB 91.1 billion (+9.2% YoY)
- 1H25 Net Profit: RMB 45.4 billion (+8.9% YoY)
- 2Q25 Revenue: RMB 39.7 billion (+7.3% YoY)
- 2Q25 EBIT: RMB 25.5 billion (+6.5% YoY)
- 2Q25 Net Profit: RMB 18.6 billion (+5.2% YoY)
- EBIT Margin (2Q25): 64.4% (down 0.5ppt YoY)
- Gross Profit Margin (2Q25): 90.4% (down 0.3ppt YoY)
- Attributable Profit Margin (2Q25): 46.8%
Despite minor margin contractions due to slightly lower gross margins and increased selling expenses, these were partly offset by reduced administrative expenses.
Product and Channel Performance
- Moutai Liquor Revenue (2Q25): Up 11% YoY, accounting for 83% of liquor revenue (vs 86% in 1Q25)
- Series Liquor Revenue (Non-Moutai): Down 7% YoY
- Direct Sales Channel: Revenue up 17% YoY, comprising 43% of baijiu revenue in 2Q25 (vs 46% in 1Q25)
- Dealer Sales Channel: Revenue up 1% YoY
- i-Moutai App Revenue (2Q25): RMB 4,890 million, representing 29% of direct sales (flat YoY, up from 25% in 1Q25)
Key Financials (2023-2027F)
| Year |
Net Turnover (RMBm) |
EBITDA (RMBm) |
Net Profit (RMBm) |
EPS (Fen) |
PE (x) |
P/B (x) |
EV/EBITDA (x) |
Dividend Yield (%) |
Net Margin (%) |
ROE (%) |
| 2023 |
150,560 |
103,747 |
74,734 |
5,949.2 |
24.2 |
8.4 |
16.2 |
3.5 |
49.6 |
36.2 |
| 2024 |
174,144 |
120,235 |
86,228 |
6,864.2 |
20.9 |
7.7 |
13.8 |
3.6 |
49.5 |
38.4 |
| 2025F |
189,972 |
130,892 |
93,860 |
7,471.7 |
19.2 |
7.0 |
12.3 |
3.9 |
49.4 |
38.1 |
| 2026F |
206,348 |
142,191 |
102,230 |
8,138.1 |
17.7 |
6.3 |
11.1 |
4.2 |
49.5 |
37.3 |
| 2027F |
223,709 |
153,890 |
110,793 |
8,819.7 |
16.3 |
5.6 |
10.1 |
4.6 |
49.5 |
36.4 |
Operational Data: Product, Channel, and Regional Insights
|
2Q25 (RMBm) |
1Q25 (RMBm) |
2Q24 (RMBm) |
YoY Change (%) |
QoQ Change (%) |
1H25 (RMBm) |
1H24 (RMBm) |
YoY Change (1H) (%) |
| Moutai Liquor |
32,032 |
43,557 |
28,860 |
11.0 |
-26.5 |
75,590 |
68,567 |
10.2 |
| Non-Moutai |
6,740 |
7,022 |
7,211 |
-6.5 |
-4.0 |
13,763 |
13,147 |
4.7 |
| Direct Sales Channel |
16,789 |
23,220 |
14,409 |
16.5 |
-27.7 |
40,010 |
33,728 |
18.6 |
| Wholesale Channel |
21,983 |
27,360 |
21,662 |
1.5 |
-19.6 |
49,343 |
47,986 |
2.8 |
| Domestic Revenue |
36,998 |
49,461 |
34,681 |
6.7 |
-25.2 |
86,459 |
79,510 |
8.7 |
| Overseas Revenue |
1,774 |
1,119 |
1,390 |
27.6 |
58.6 |
2,893 |
2,204 |
31.3 |
Contract Liabilities and Cash Flow Trends
- Contract Liabilities: RMB 5.5 billion at end-2Q25, down 45% YoY and 37% QoQ
- Cash Inflow from Sales (2Q25): RMB 38.9 billion, down 5% YoY and 31% QoQ
- Domestic Wholesalers: Increased by 106 QoQ, reaching 2,280 by end-2Q25
Wholesale Price Pressures Expected to Persist
- Despite the implementation of channel control measures since June 2025, wholesale prices for Feitian Moutai remain under pressure.
- Wholesale price of original case Feitian Moutai: Around RMB 1,900/bottle.
- Wholesale price of unpacked Feitian Moutai: Around RMB 1,870/bottle.
- Price pressure is expected to persist into 2H25 amid China’s anti-extravagance policies.
Risks and Earnings Revision
- No earnings revision at this time.
- Key risks include:
- Slower-than-expected economic recovery.
- Large-scale promotions on online platforms.
- Volatility in Feitian Moutai’s wholesale price.
Valuation and Recommendation
- Current Valuation: 19.2x 2025F PE, 17.7x 2026F PE
- Target Price: RMB 1,722 (DCF-based, reflecting 23.0x 2025F PE and 21.2x 2026F PE)
- Recommendation: BUY (maintained)
Profit & Loss, Balance Sheet, and Cash Flow Highlights (2024-2027F)
|
2024 |
2025F |
2026F |
2027F |
| Net Turnover (RMBm) |
174,144 |
189,972 |
206,348 |
223,709 |
| EBITDA (RMBm) |
120,235 |
130,892 |
142,191 |
153,890 |
| Net Profit (RMBm) |
86,228 |
93,860 |
102,230 |
110,793 |
| EPS (Fen) |
6,864.2 |
7,471.7 |
8,138.1 |
8,819.7 |
| Dividend Yield (%) |
3.6 |
3.9 |
4.2 |
4.6 |
| Net Debt/(Cash) to Equity (%) |
(80.1) |
(91.6) |
(93.4) |
(94.5) |
| ROE (%) |
38.4 |
38.1 |
37.3 |
36.4 |
Summary
Kweichow Moutai remains on track to achieve its full-year targets, supported by strong revenue and profit growth in the first half of 2025. While wholesale price pressures are expected to continue in the second half, the company’s leadership in the premium baijiu market, robust direct sales growth, and sustained profitability underpin its long-term investment appeal. UOB Kay Hian’s BUY rating is reaffirmed, with a DCF-based target price of RMB 1,722, reflecting continued confidence in Moutai’s resilient business model and growth prospects.
