---
endpoint: analytics
pattern: Consumer
status: done
latency_ms: 301517
conversation_id: 0354571b-e9d0-41b5-836d-342e7c1c2f97
citations: 11
created: 2026-05-31 20:26:10Z
---

# Provide a one‑year narrative of Kweichow Moutai, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Kweichow Moutai (600519 CH) — One-Year Narrative

**Reference date: 31 May 2026. Reporting window: ~May 2025 to May 2026.**
**Coverage note**: CLSA internal coverage in scope tops out at late-June 2025. The mid-2025 → 2026 narrative is bridged with company filings and StreetAccount newswires.

---

## Executive arc

Over the last twelve months Moutai went from being treated as the defensive premium-baijiu compounder of Chinese consumer to being re-priced as a cyclical proxy for Chinese government & business banqueting demand. A May-2025 tightening of Party/State Council rules on alcohol at official functions — and an enforcement spike in Henan — collapsed the wholesale price of the flagship Feitian SKU through 1H25, drove a steep de-rating, and forced management to lean on three new playbooks: (i) channel-stabilising distributor meetings, (ii) an ex-factory price hike on the 2026 vintage, and (iii) the first announced share buyback in the company's history. FY2025 reported earnings ultimately missed sell-side consensus by ~8.5%, and Q1 2026 confirmed growth had cooled to mid-single-digits on the top line and ~1.5% at the bottom line, validating the bearish camp on fundamentals while leaving the bull case dependent on the buyback floor + the policy cycle turning.

---

## 1. Starting point — May 2025 (the "still defensible" phase)

CLSA visited Moutai's 19 May 2025 shareholder meeting with the stock at **Rmb1,578.98** and an **Outperform** rating, target Rmb1,718 (~+9% upside, market cap US$275bn) [4][2]. Management reiterated its **FY25 revenue-growth target of ~9% YoY**, but flagged that COGS would grow +11% and operating expenses **+27% YoY** as the company front-loaded advertising and marketing to defend brand position [1]. The framing was unmistakably defensive: chairman Mr. Zhang stated he "personally supports" the stricter alcohol regulations at government work meals, conceded that the "previous scenario of drinking a lot at hotels has become very rare", and pointed to a sales-system reform aimed at younger consumers and "family gatherings and memorable life moments" [1]. CLSA's model carried Revenue Rmb189.4bn / Net profit Rmb94.2bn for FY25E (EPS Rmb75.0; +10% YoY), ROE ~38%, dividend yield ~3.6%, net cash position [3]. Stock was already showing strain: **-7.9% over the prior 12M and 12M low of Rmb1,261** [5].

## 2. The policy shock — May-June 2025

In mid-May the Central Committee and State Council issued a directive tightening alcohol restrictions at party and government work-meal events: the regime moved from the 2013 "no high-end alcohol (>Rmb300/bottle)" rule to effectively **"no alcohol"** at official functions [8]. The catalyst that put real teeth in execution was a death of a county-level official in **Henan** from drinking, which triggered direct Central Inspection Team supervision and the strictest enforcement of the cycle [7]. An expert call CLSA hosted on 10 June 2025 captured the depth of the shock:

- **Henan baijiu sell-through fell ~30% YoY in May 2025**, with high-end premium brands hit hardest [6].
- Public servants and SOE employees stopped attending banquets and gatherings with alcohol from May onward [7].
- Distributor prepayment/shipment progress slowed and channel inventory rose sequentially [6].
- The 2025 China Alcoholic Drinks Association mid-year report found **59.7% of baijiu companies** reported declining operating profit in 1H25 [13].

By the end of June CLSA's weekly channel checks had the **Feitian wholesale price down to ~Rmb1,800/bottle**, which it flagged as **the weighted-average cost level for Moutai distributors** — i.e. the line below which the distributor network would start unwinding [9]. Moutai held emergency meetings with distributors to stabilise the channel [9], but CLSA had no clear visibility on when policy execution would normalise [9]. Direct-to-consumer traffic was deteriorating in parallel: **YTD sales value through the iMoutai app was down ~83% YoY as of 25 June 2025** [10]. Across the broader baijiu group, the wholesale price index fell ~0.6% in early June with Feitian falling another ~3% WoW the following week [11]. Year-to-date as of late June **all baijiu stocks had retreated**, with Fen Wine the best of a bad bunch (-4.2%) and Yingjia the worst (-28.0%) [14].

Management changes layered on top: on 19 June 2025 Guizhou province nominated **Mr. Xiang Ping and Mr. Zhang Guichao as deputy GM candidates for Moutai Group** — both already on the Group Party Committee [12].

## 3. The de-rating and buyback response — late 2025

The CLSA corpus has a coverage gap from July 2025 onward, but the public-filing trail picks up the next inflection clearly. By late January 2026 the stock was hitting fresh 52-week lows in successive sessions in the StreetAccount lists alongside other baijiu names — a sustained bear move from the Rmb1,578 starting point. Management's response was a step-change in capital-return policy: on **28 November 2025 the EGM approved Moutai's first share-buyback programme** — Rmb1.5bn-Rmb3.0bn at a maximum repurchase price of **Rmb1,863.67/share**, shares to be **cancelled** (i.e. EPS-accretive), 6-month execution window from the EGM date [18]. By the time the Q1 2026 report was filed, Moutai had already repurchased **962,426 shares (0.077% of capital) for Rmb1.35bn at a price band of Rmb1,322.60-Rmb1,499.74** — confirming heavy execution while the stock traded in the low-Rmb1,300s to mid-Rmb1,400s [18].

## 4. Pricing action — March 2026

On 31 March 2026, pre-China open, Moutai announced an **8.6% hike in the ex-factory price of the 53%vol 500ml Feitian** to **Rmb1,269/bottle from Rmb1,169/bottle** for the 2026 vintage [21]. The stock closed +Rmb39 the same day at Rmb1,459 [21]. This was both a margin lever and a signalling move — reasserting brand pricing power into a soft demand backdrop and re-establishing a wider gap between the ex-factory and wholesale prices to give distributors recovered economics.

## 5. The earnings reality check — April 2026

**FY2025 results (released 16 April 2026)**: Net income attributable came in at **Rmb82.32bn vs FactSet consensus of Rmb89.99bn (32 estimates, range Rmb84.71-95.12bn)** — an **~8.5% miss**, with reported NI falling below the entire estimate range [20]. The same day Moutai released its **2025 ESG report** [25]. The miss validated the bear thesis on FY25 magnitude and made the May-2025 management 9% sales-growth target look optimistic in hindsight.

**Q1 2026 results (released 24 April 2026)**: The official quarterly report painted a picture of decelerated but still positive growth:

| Metric (Rmb) | Q1 2026 | Q1 2025 | YoY |
|---|---|---|---|
| Revenue (营业收入) | 53.91bn | 50.60bn | **+6.54%** [15] |
| Net profit attributable | 27.24bn | 26.85bn | **+1.47%** [15] |
| Operating cash flow | 26.91bn | 8.81bn | **+205.5%** [15] |
| Basic EPS | 21.76 | 21.38 | +1.78% [15] |
| Weighted-average ROE | 10.57% | 10.92% | -0.35ppt [15] |

Sales-mix detail showed Moutai-branded liquor at Rmb46.00bn vs Series Liquor at Rmb7.88bn; direct sales at Rmb29.50bn vs wholesale at Rmb24.38bn; domestic Rmb53.73bn vs overseas Rmb0.15bn [16]. **The iMoutai digital platform generated Rmb21.55bn (ex-VAT) in YTD product sales** [17]. Notably, **domestic distributor count fell to 2,098 — a net reduction of 261 distributors** since year-start (primarily series-liquor channels) [17]. Net profit slightly missed consensus (Rmb27.24bn vs FactSet Rmb27.71bn) but the magnitude of miss was much narrower than the FY [19], suggesting visibility had improved.

The macro tape confirmed the industry was still under pressure: **China baijiu production for Jan-Mar 2026 was 952K kL, -1.7% YoY** [24].

## 6. Sell-side bifurcation — late April 2026

The two-sided debate crystallised in opposing rating actions within ten days, both at very similar share prices:

- **17 April 2026**: UOB Kay Hian **downgraded to Hold from Buy** at Rmb1,407.24 — likely reading the FY2025 miss + production data as confirmation of structural softness [23].
- **27 April 2026**: UBS **upgraded to Buy from Neutral** at Rmb1,403.20 — likely reading the Q1 ex-factory price hike + buyback + narrowed Q1 miss as a bottoming signal [22].

## 7. How investor sentiment evolved — the through-line

| Phase | Stock context | Dominant investor question | Resolution |
|---|---|---|---|
| **May 2025** | ~Rmb1,580; -8% TTM | "Is the consumption-scenario shift survivable?" | Management says yes; CLSA says yes-but-slow; O-PF kept [1][4] |
| **May-Jun 2025** | Pressure mounts | "How deep is the demand hit from the alcohol ban?" | Henan -30%; Feitian wholesale at distributor cost line [6][9] |
| **2H25 (corpus gap)** | New 52-week lows by late Jan 2026 | "Is there a floor?" | Mgmt answers via the Nov 2025 buyback [18] |
| **Mar-Apr 2026** | ~Rmb1,400-1,460 | "Is the worst behind us?" | Price hike + buyback execution + Q1 stable [15][18][21] |
| **Apr 2026** | Post-results | "Has growth permanently down-shifted?" | FY25 missed by 8.5%; Q1 revenue +6.5% / NP +1.5% — yes, the prior 14-20% growth era is over [15][20] |

## 8. Drivers of the re-rating — synthesised

The 12M de-rating was driven primarily by a **demand-side regime change** (Party/State Council alcohol ban tightening + Henan enforcement spike), not a brand-equity erosion. Moutai's chairman explicitly endorsed the policy [1], and CLSA noted the **scarcity of Moutai products would remain due to production limits** [1] — both supportive of long-term brand value. The acute valuation pressure came from:

1. **Wholesale-price collapse → distributor margin compression**, which threatened the channel's willingness to take inventory [9].
2. **Visibility blackout** — neither management, nor CLSA, nor expert callers could call when policy execution would ease (only signal was "after Central Inspection Team leaves in late June/July") [6].
3. **Quality of growth deterioration** — Q1 26 op cash flow +205% YoY looks spectacular but is explained by a subsidiary finance-company deposit reclass [16], not core business strength; the iMoutai platform numbers and distributor cull are more telling.
4. **Earnings credibility hit** — the FY25 ~8.5% consensus miss [20] forced a reset of forward estimates, and the FY25 ROE step-down implied by Q1 26's ROE drop will continue.

Management's response — the **price hike, buyback (first ever, with cancellation), and explicit channel-stabilisation work** — establishes a hard valuation floor and signals capital-return discipline, which is why UBS could justify an upgrade at the same time fundamentals-focused houses were cutting. The forward debate is now binary: if government banqueting demand returns post the inspection cycle, Moutai's 2027 numbers look bombed-out cheap; if the policy persists, Moutai is permanently a mid-single-digit revenue grower with terminal ROE ~10-12% rather than 30%+.

## Risks called out by CLSA at the start of the period

Slower-than-expected consumption recovery, unfavourable government policies, delayed ex-factory price hikes, and weaker-than-expected sales volume release [3] — three of the four materialised within months.

---

**Sources**

[1] Kweichow Moutai – O-PF (Shareholder meeting takeaways) — CLSA (19 May 2025) — 607959909LinqAlpha.PDF
[2] Same as above — page with priced price / 12M target / market cap
[3] Same as above — CLSA FY22-26 financial model & risk section
[4] Same as above — companies-mentioned block (O-PF, Rmb1,578.98)
[5] Same as above — stock performance table (1M/3M/12M absolute and relative)
[6] China baijiu (Expert call on baijiu policy) — CLSA (10 Jun 2025) — 607961641LinqAlpha.PDF
[7] Same as above — May enforcement detail, Henan death, SOE/public-servant behaviour
[8] Same as above — Baijiu policy further tightening (table summarising 17-May-2025 CLSA sector note)
[9] China baijiu weekly (Baijiu weekly wrap) — CLSA (27 Jun 2025) — 607962969LinqAlpha.PDF
[10] Same as above — iMoutai sales tracking (YTD -83% YoY)
[11] China baijiu weekly (Baijiu weekly wrap) — CLSA (20 Jun 2025) — 607962480LinqAlpha.PDF
[12] Same as above — Mr. Xiang Ping & Mr. Zhang Guichao deputy-GM nomination
[13] Same as above — China Alcoholic Drinks Association 2025 mid-term report
[14] CLSA weekly (27 Jun 2025) — stock-price changes section
[15] Kweichow Moutai 2026 Q1 Report — 23 Apr 2026 (公司公告)
[16] Same as above — sales by product / channel / region
[17] Same as above — iMoutai revenue and distributor count
[18] Same as above — buyback programme details (EGM 28 Nov 2025; cap Rmb30bn; max Rmb1,863.67/share; 962,426 shares repurchased for Rmb1.35bn)
[19] StreetAccount — Moutai Q1 NI Rmb27.24bn vs FactSet Rmb27.71bn (24 Apr 2026)
[20] StreetAccount — Moutai FY NI Rmb82.32bn vs FactSet Rmb89.99bn (16 Apr 2026)
[21] StreetAccount — Feitian ex-factory price raised to Rmb1,269 from Rmb1,169 (31 Mar 2026)
[22] StreetAccount — UBS upgrade to Buy from Neutral at Rmb1,403.20 (27 Apr 2026)
[23] StreetAccount — UOB Kay Hian downgrade to Hold from Buy at Rmb1,407.24 (17 Apr 2026)
[24] StreetAccount — China Jan-Mar baijiu production 952K kL, -1.7% YoY (21 Apr 2026)
[25] StreetAccount — Moutai 2025 ESG report released (16 Apr 2026)

## Citations

- [15] **贵州茅台2026年第一季度报告** · external
- [16] **贵州茅台2026年第一季度报告** · external
- [17] **贵州茅台2026年第一季度报告** · external
- [18] **贵州茅台2026年第一季度报告** · external
- [19] **Kweichow Moutai reports Q1 net income attributable CNY27.24B vs FactSet CNY27.71B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4639901&_doc_date=2026-04-24&_doc_product=SA>
- [20] **Kweichow Moutai reports FY net income attributable CNY82.32B vs FactSet CNY89.99B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4629928&_doc_date=2026-04-16&_doc_product=SA>
- [21] **Kweichow Moutai increases Feitian's ex-factory price for 53%vol 500ml moutai (2026) to CNY1,269 per bottle from CNY1,169 per bottle** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4615338&_doc_date=2026-03-31&_doc_product=SA>
- [22] **Kweichow Moutai upgraded to buy from neutral at UBS** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4642739&_doc_date=2026-04-27&_doc_product=SA>
- [23] **Kweichow Moutai downgraded to hold from buy at UOB Kay Hian Securities** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4630649&_doc_date=2026-04-17&_doc_product=SA>
- [24] **China Jan-Mar liquor (baijiu) production 952K kL, (1.7%) y/y** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4632868&_doc_date=2026-04-21&_doc_product=SA>
- [25] **Kweichow Moutai releases ESG report 2025** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4629946&_doc_date=2026-04-16&_doc_product=SA>

