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Kweichow Moutai Co Ltd Class A 600519

Morningstar Rating
¥1,497.51 −3.89 (0.26%)
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Company Report

Kweichow Moutai: Wholesale Price Drop Sparks Market Concerns, but Profit Outlook Is Intact

The recent fall of the flagship 53-degree Feitian Moutai wholesale price to about CNY 2,100 per 500ml bottle, from CNY 2,630 as of end-March 2024, has raised market concerns over premium baijiu’s demand and profit outlook. While we expect China’s baijiu sales as a whole to remain sluggish in 2024, we continue to believe premium baijiu’s demand is resilient. We expect Moutai, and other premium baijiu’s profit outlooks to remain steady. Hence, we maintain both our earnings forecasts and fair value estimate of CNY 1,780 per share for Moutai. We continue to believe Moutai’s unique cultural status, unmatched brand image, and outstanding product quality, make it best positioned to benefit from China’s baijiu premiumization trend over the long term. Following the recent share price weakness, we think the shares are currently undervalued.

Price vs Fair Value

600519 is trading at a 750% premium.
Price
¥1,501.40
Fair Value
¥9,211.00
Uncertainty
Medium
1-Star Price
¥7,752.00
5-Star Price
¥8,697.00
Economic Moat
Lxjzp
Capital Allocation
Vbck

Bulls Say, Bears Say

Bulls

Kweichow Moutai’s iconic status in Chinese drinking culture is extremely difficult for its competitors to duplicate, giving it strong pricing power, the benefits of which are reflected in its industry-leading profitability.

Bears

China's anticorruption campaign could add pressure to Moutai’s revenue growth.

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News

Trading Information

Previous Close Price
¥1,501.40
Day Range
¥1,492.531,515.00
52-Week Range
¥1,410.101,935.00
Bid/Ask
¥1,497.51 / ¥1,497.96
Market Cap
¥1.88 Tril
Volume/Avg
2.9 Mil / 3.1 Mil

Key Statistics

Price/Earnings (Normalized)
24.17
Price/Sales
11.96
Dividend Yield (Trailing)
2.06%
Dividend Yield (Forward)
2.06%
Total Yield
2.06%

Company Profile

Kweichow Moutai is one of China’s leading liquor producers. The company was established in 1951 and its headquarters is located in Moutai Town, Guizhou province, southwest China. Its flagship product, 53-degree Feitian Moutai, is known as China’s national drink and has been consumed during many high-profile historical and political events. Given its remarkable pricing power, premium product quality, and unparalleled brand strength, the company achieves the industry's highest retail prices and profit margins.
Sector
Consumer Defensive
Industry
Beverages - Wineries & Distilleries
Stock Style Box
Large Growth
Total Number of Employees
33,302

Competitors

Valuation

Metric
600519
002304
000858
Price/Earnings (Normalized)
24.1712.1516.00
Price/Book Value
7.872.153.53
Price/Sales
11.963.635.84
Price/Cash Flow
26.7413.0315.51
Price/Earnings
600519
002304
000858

Financial Strength

Metric
600519
002304
000858
Quick Ratio
5.202.694.44
Current Ratio
6.483.994.95
Interest Coverage
9,010.552,197.022,546.77
Quick Ratio
600519
002304
000858

Profitability

Metric
600519
002304
000858
Return on Assets (Normalized)
29.55%15.30%19.60%
Return on Equity (Normalized)
35.71%19.29%24.83%
Return on Invested Capital (Normalized)
33.77%18.20%22.83%
Return on Assets
600519
002304
000858
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