UOB Kay Hian
Report Date: August 13, 2025
Kweichow Moutai (600519 CH): Robust 1H25 Performance, Pricing Pressure Ahead – Investment Analysis & Outlook
Company Overview: China’s Liquor Giant
Kweichow Moutai is a leading producer of Moutai liquor, recognized globally as one of the three most famous distilled spirits. The company’s flagship product, “Kweichow Moutai,” stands as a symbol of premium spirits in China and worldwide.
- GICS Sector: Consumer Staples
- Shares Issued: 1,256.2 million
- Market Cap: RMB 1,805,206.5 million (US\$251.2 billion)
- Major Shareholder: Kweichow Moutai Group (54.07%)
- FY25 NAV/Share: RMB 206.69
- FY25 Net Cash/Share: RMB 187.45
- 3-month Avg Daily Turnover: US\$633.2 million
- 52-week High/Low: RMB 1,910.00 / RMB 1,245.83
Stock Performance and Valuation
Despite facing some volatility, Kweichow Moutai’s stock remains resilient. Recent price action has shown a slight uptick over one month (+0.7%) but a decline year-to-date (-5.7%). The stock currently trades at 19.2x 2025F PE and 17.7x 2026F PE, with a dividend yield projected to rise from 3.6% in 2024 to 4.6% by 2027.
- Current Price: RMB 1,437.04
- Target Price: RMB 1,722.00 (implying 19.8% upside)
- Broker Recommendation: BUY (Maintained)
1H25 Results: Growth On Track
Kweichow Moutai delivered solid results for the first half of 2025, meeting its full-year growth targets.
- 1H25 Revenue: RMB 91.1 billion (+9% YoY)
- 1H25 Net Profit: RMB 45.4 billion (+9% YoY)
- 2Q25 Revenue: RMB 39.7 billion (+7% YoY)
- 2Q25 Net Profit: RMB 18.6 billion (+5% YoY)
| Key Financials (RMB million) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
150,560 |
174,144 |
189,972 |
206,348 |
223,709 |
| EBITDA |
103,747 |
120,235 |
130,892 |
142,191 |
153,890 |
| Operating Profit |
101,810 |
118,150 |
128,816 |
140,030 |
151,645 |
| Net Profit |
74,734 |
86,228 |
93,860 |
102,230 |
110,793 |
| EPS (Fen) |
5,949.2 |
6,864.2 |
7,471.7 |
8,138.1 |
8,819.7 |
| PE (x) |
24.2 |
20.9 |
19.2 |
17.7 |
16.3 |
| Dividend Yield (%) |
3.5 |
3.6 |
3.9 |
4.2 |
4.6 |
| Net Margin (%) |
49.6 |
49.5 |
49.4 |
49.5 |
49.5 |
| ROE (%) |
36.2 |
38.4 |
38.1 |
37.3 |
36.4 |
Product & Channel Performance: Moutai Leads, Non-Moutai Lags
- Moutai Liquor: Revenue up 11% YoY in 2Q25, accounting for 83% of liquor sales (down from 86% in 1Q25)
- Non-Moutai Series: Revenue down 7% YoY in 2Q25
- Direct Sales Channel: Up 17% YoY, comprising 43% of baijiu revenue (down from 46% in 1Q25)
- Dealer Sales: Up 1% YoY in 2Q25
- i-Moutai App: Revenue flat YoY at RMB 4.89 billion, 29% of direct sales in 2Q25 (up from 25% in 1Q25)
Segment and Geographic Revenue Breakdown
| Liquor Revenue (RMB million) |
2Q25 |
1Q25 |
2Q24 |
YoY Change (%) |
QoQ Change (%) |
1H25 |
1H24 |
YoY Change (%) |
| Moutai |
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 |
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 |
36,998 |
49,461 |
34,681 |
6.7 |
-25.2 |
86,459 |
79,510 |
8.7 |
| Overseas |
1,774 |
1,119 |
1,390 |
27.6 |
58.6 |
2,893 |
2,204 |
31.3 |
Operational Highlights: Contract Liabilities & Wholesaler Expansion
- Contract Liabilities: RMB 5.5 billion at end-2Q25, down 45% YoY and 37% QoQ
- Cash Inflow from Sales: RMB 38.9 billion in 2Q25, down 5% YoY and 31% QoQ
- Domestic Wholesalers: Added 106 in 2Q25, total now 2,280
Market Impact: Pricing Pressure Persists
Despite channel control initiatives implemented in June 2025, wholesale prices for Feitian Moutai bottles remain subdued, with original case bottles trading around RMB 1,900 and unpacked bottles at RMB 1,870. This pressure is expected to continue into the second half of 2025, largely driven by China’s ongoing anti-extravagance policies.
Risk Factors
- Slower-than-expected economic recovery
- Large-scale promotions on online platforms
- Volatility in Feitian Moutai wholesale prices
Valuation & Investment Recommendation
UOB Kay Hian maintains a BUY recommendation with a DCF-based target price of RMB 1,722. This target reflects a 23.0x 2025F PE and 21.2x 2026F PE.
- Current PE (2025F): 19.2x
- Current PE (2026F): 17.7x
- Dividend Yield: 3.9% (2025F), up to 4.6% (2027F)
Profit & Loss, Balance Sheet, Cash Flow – Key Metrics
| Metric |
2024 |
2025F |
2026F |
2027F |
| Net Turnover (RMBm) |
174,144 |
189,972 |
206,348 |
223,709 |
| Net Profit (RMBm) |
86,228 |
93,860 |
102,230 |
110,793 |
| EBITDA Margin (%) |
69.0 |
68.9 |
68.9 |
68.8 |
| Net Margin (%) |
49.5 |
49.4 |
49.5 |
49.5 |
| ROA (%) |
30.2 |
29.4 |
28.5 |
27.8 |
| ROE (%) |
38.4 |
38.1 |
37.3 |
36.4 |
| Net Debt/(Cash) to Equity (%) |
-80.1 |
-91.6 |
-93.4 |
-94.5 |
Conclusion: Investment Thesis for Kweichow Moutai
Kweichow Moutai continues to demonstrate strong financial performance and operational resilience, maintaining robust growth in its core Moutai liquor segment, expanding direct sales channels, and strengthening its wholesaler base. However, investors should remain cautious of ongoing wholesale price pressures driven by regulatory policies and broader economic uncertainties.
With a solid balance sheet, consistent cash generation, and attractive dividend yields, Kweichow Moutai remains a compelling long-term holding for investors seeking exposure to China’s premium consumer staples sector. UOB Kay Hian’s maintained BUY rating and target price highlight continued confidence in the company’s ability to deliver shareholder value amidst a dynamic market environment.
