---
endpoint: analytics
pattern: Consumer
status: done
latency_ms: 182180
conversation_id: b2a88436-2726-4bbf-89fb-b0932d815091
citations: 13
created: 2026-05-31 21:44:05Z
---

# How does Kweichow Moutai’s valuation compare to peers, and what justifies its premium/discount?

# Kweichow Moutai (600519.CH) — Valuation vs Baijiu Peers

## Bottom Line

Moutai still trades at the structural premium of the Chinese baijiu group on **absolute** PE, ROE, and brand-power grounds, but the **relative** premium versus peers has compressed materially from its 2020 peak as Feitian's wholesale price weakens and an alcohol-policy crackdown disproportionately hurts the ultra-premium segment. CLSA values Moutai on a 20x base-case forward PE (vs. 18x for Wuliangye), with the company itself running at a wider observed PE gap because of superior growth, ROE, and cash generation.

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## Snapshot — Moutai vs Key National Baijiu Peers

| Metric (2025E unless noted) | Moutai (600519) | Wuliangye (000858) | Source |
|---|---|---|---|
| 12M Target Price (CLSA) | Rmb 1,718 | Rmb 172 | [2][3] |
| Rating | O-PF | O-PF | [2][3] |
| Market cap | US$ 275bn (May'25) / US$ 267.7bn (Apr'25) | US$ 64.6bn (Jun'25) / US$ 68.7bn (Apr'25) | [7][3] |
| 2025E PE (CL) | **20.6x** | 13.3x | [2][4] |
| 2026E PE (CL) | 18.2x | 12.1x | [2][4] |
| 2025E EPS growth | 10.0% | 8.0% | [2][4] |
| 2025E ROE | **37.9%** | 23.8% | [2][4] |
| 2025E Dividend yield | 3.6% | **4.9%** | [2][4] |
| 2025E FCF yield | 4.9% | 8.0% | [2][4] |
| 2025E PB | 7.4x | 3.0x | [2][4] |
| Net cash per share (2025E) | Rmb 151 | Rmb 34.8 | [2][4] |
| 2025E Revenue (Rmb bn) | 189.4 | 95.7 | [2][4] |
| 2025E Net profit (Rmb bn) | 94.2 | 34.9 | [2][4] |
| Base-case forward PE applied | **20x** (in line with 2016-19 pre-Covid avg) | **18x** (in line with 2016-19 avg) | [1][5] |
| Bull / Bear case PE | 25x / 15x | 20x / 12x | [1][5] |

On 2025E earnings, Moutai trades at roughly a **55% PE premium** to Wuliangye (20.6x vs 13.3x), a **150% PB premium** (7.4x vs 3.0x), and offers roughly **130bp lower dividend yield**. Despite the lower yield, CLSA still applies a **higher target multiple** to Moutai (20x vs 18x in their base case), reflecting structural quality, not just current optics.

---

## What Justifies the Premium

**1. Brand power and pricing-power moat.** CLSA explicitly justifies the 20x base case on the grounds that "Moutai's high-end brand power remains strong and the impact from slowdown will not be that severe as anti-corruption period" [1]. The Feitian SKU sits at the apex of the Chinese premium-spirits hierarchy, with channel ex-factory pricing raised ~20% in November 2023 (53° Feitian/Wuxing) — a top-of-cycle action no peer attempted at scale.

**2. Superior return profile.** Moutai's 2025E ROE of 37.9% is roughly **1,400bp** above Wuliangye's 23.8% [2][4], driven by 92.0% gross margins in 1Q25 [10] and what management describes as "the lowest level [of sales-expense-to-revenue ratio] in the industry" [15].

**3. Faster top-line and EPS growth.** Moutai is guiding to **9% revenue growth in 2025** as it "transitions from a phase of rapid growth to one focused on high-quality development" [11], with CLSA modelling 10% EPS growth in 2025E and 13.3% in 2026E [2]. Wuliangye is only "targeting better than the sector growth" and growth "in line with GDP growth" [9] — a meaningfully lower bar — with CLSA modelling 8% / 9.6% EPS growth [4].

**4. Balance-sheet quality.** Moutai carries Rmb 151/share of net cash by 2025E [2] versus Rmb 34.8 at Wuliangye [4], and committed in August 2024 to "distribute cash dividends of not less than 75% of the net profit attributable to shareholders…in each year from 2024 to 2026" [12] — anchoring the return story.

**5. Defensive earnings during baijiu downturns.** In the current "profound industry adjustment," management notes that "market share and industry resources [are] increasingly consolidating among leading enterprises" [13] — a structural call that historically has favoured Moutai over regional and even other national premium brands.

---

## What's Compressing the Premium

**1. The Moutai-vs-rest PE gap has narrowed sharply.** CLSA's tracking of the historical multiple shows the Premium-baijiu PE peaked at ~52-53x in Nov 2020 while regional baijiu was at ~35-49x; by Mar 2025, premium PE had de-rated to ~15-23x while regional PE was ~10-19x [6] — a much tighter range, implying the market is no longer paying for "premium scarcity" at 2020/21 multiples.

**2. Wholesale price erosion at Feitian.** As of late June 2025, Feitian wholesale dropped to ~Rmb 1,800/bottle — "around the weighted average cost for Moutai distributors" — a level CLSA flags as critical: "it is very important for Moutai to maintain its wholesale price at above this level" [8]. Distributor-meeting stabilisation attempts continued through June.

**3. Alcohol-policy crackdown is harsher on ultra-premium.** Following the May 18 policy tightening, baijiu sell-through in Henan declined 30% YoY in May, with the impact most acute on "high end premium brands" — public servants and SOE employees stopped attending alcohol-related banquets [11 already cited; expert call doc]. Premium SKUs have less consumer-spending breadth to absorb the political-banquet demand shock.

**4. Yield disadvantage in a yield-seeking market.** Despite a 75% payout commitment [12], Moutai's 2025E dividend yield of 3.6% is materially below Wuliangye's 4.9% [4], with WLY also signalling intent to "increase the dividend payout making the stock more attractive in terms of dividend yield" [9]. In a defensive-rotation environment, this favours the cheaper peer.

**5. Multiple has de-rated through CLSA's own price-target history.** CLSA's TP for Moutai walked down from Buy Rmb 2,326 (Jan 2024) and Rmb 2,187 (May 2024) to O-PF Rmb 1,818 (Jun 2024) and now Rmb 1,718 (Nov 2024 onwards) [from rating history table], reflecting both EPS cuts and de-rating.

---

## Synthesis — Why the Premium Persists Despite Compression

Moutai's quality metrics justify a permanent premium: at 37.9% ROE, ~92% gross margin, double-digit growth, and Rmb 151/share of net cash [2][10], it has the highest "return per unit of risk" in the group. CLSA's analytical move — applying 20x base PE vs 18x for Wuliangye [1][5] — is roughly a 10-15% structural premium, not the 50%+ that prevailed in 2020. That is the **right framework**: Moutai deserves a premium **on multiples**, but the premium has rationally normalised as (a) growth has converged toward GDP+, (b) the wholesale-price floor has been tested, and (c) the policy-tightening cycle hits the high-end harder.

The setup today: Moutai still earns its premium on brand, ROE, and growth, but the **observed PE gap (20.6x vs 13.3x)** is wider than the **fair-value premium CLSA applies (20x vs 18x)**, suggesting the market is paying for quality, while sell-side judgement says peer multiples have room to converge upward as the cycle normalises. Catalysts to re-widen the premium include Feitian wholesale stabilising above Rmb 1,800 [8], policy execution easing post-July [expert call], and continued execution against the 9% growth guide [11].

---

**Sources**
[1] Kweichow Moutai – 1Q25 slight beat (CLSA, 29-Apr-2025) — 607957506LinqAlpha.PDF
[2] Kweichow Moutai – 1Q25 slight beat: Financials table (CLSA, 29-Apr-2025) — 607957506LinqAlpha.PDF
[3] Wuliangye Yibin – 1Q25 a slight beat: Cover stats (CLSA, 27-Apr-2025) — 607957063LinqAlpha.PDF
[4] Wuliangye Yibin – Shareholder meeting takeaway: Financials table (CLSA, 22-Jun-2025) — 607962523LinqAlpha.PDF
[5] Wuliangye Yibin – Shareholder meeting takeaway: Valuation details (CLSA, 22-Jun-2025) — 607962523LinqAlpha.PDF
[6] Baijiu weekly wrap – Premium vs Regional PE history (CLSA, 30-May-2025) — 607960945LinqAlpha.PDF
[7] Kweichow Moutai – Shareholder meeting takeaways: Cover stats (CLSA, 19-May-2025) — 607959909LinqAlpha.PDF
[8] China baijiu weekly – Feitian wholesale at Rmb 1,800 (CLSA, 27-Jun-2025) — 607962969LinqAlpha.PDF
[9] Wuliangye – Full-year target unchanged; dividend yield 4.9% (CLSA, 22-Jun-2025) — 607962523LinqAlpha.PDF
[10] Kweichow Moutai – 1Q25 GPM 92.0% (CLSA, 29-Apr-2025) — 607957506LinqAlpha.PDF
[11] Kweichow Moutai 2024 Annual Performance Briefing — 9% 2025 growth target (TFS earnings call)
[12] Kweichow Moutai Q2 2024 — 2024-2026 dividend payout commitment ≥75% (TFS earnings call)
[13] Kweichow Moutai – industry consolidation commentary (TFS earnings call)

## Citations

- [1] **607957506LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957506LinqAlpha.PDF>
- [2] **607957506LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957506LinqAlpha.PDF>
- [3] **607957063LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957063LinqAlpha.PDF>
- [4] **607962523LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962523LinqAlpha.PDF>
- [5] **607962523LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962523LinqAlpha.PDF>
- [6] **607960945LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960945LinqAlpha.PDF>
- [7] **607959909LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959909LinqAlpha.PDF>
- [8] **607962969LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962969LinqAlpha.PDF>
- [9] **607962523LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962523LinqAlpha.PDF>
- [10] **607957506LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607957506LinqAlpha.PDF>
- [11] **Guizhou Moutai - "Enhancing Quality and Efficiency to Strengthen Confidence, Promoting Development through Communication and Mutual Trust" 2025 Investor Collective Reception Day for Listed Companies in Guizhou Region and 2024 Annual Performance Briefing** · external
- [12] **Q2 2024 Kweichow Moutai Co., Ltd.** · external
- [13] **Kweichow Moutai-2024 Collective Reception Day for Investors of Listed Companies in Guizhou Province and 2023 Performance Briefing** · external

