Analysis of Moutai Liquor Price to Urban Wage Ratio and Investment Logic

Based on the data and analysis I have collected, I will analyze the current status of the investment logic of Moutai liquor price to urban wage ratio from multiple dimensions.

In 2025, the ratio of Moutai liquor price to urban wages has adjusted back to the range of 25%-38%, which does deviate from the historical stable range of 30%-50%, but it is necessary to combine the current macroeconomic environment to evaluate whether its investment logic still holds.

• Stock Price: 1,433.10 CNY [0]
• Market Capitalization: 1.80 Trillion CNY [0]
• P/E Ratio: 19.98x [0]
• 52-Week Range: 1,383.18-1,657.99 CNY [0]

• Net Profit Margin: 51.51% [0]
• ROE: 36.48% [0]
• Current Ratio: 6.62 [0]
• Debt Risk: Low Risk [0]

According to DCF model analysis, Moutai’s reasonable valuation range is 1,088.32-2,564.80 CNY, the probability-weighted value is 1,743.28 CNY, which has a 21.6% upside potential compared to the current stock price [0].

• Conservative Scenario: 1,088.32 CNY (-24.1%) [0]
• Base Scenario: 1,576.71 CNY (+10.0%) [0]
• Optimistic Scenario: 2,564.80 CNY (+79.0%) [0]

The ratio of Moutai liquor price to urban wages did maintain in the range of 30%-50% from 2001 to 2024, which reflects Moutai’s special attribute as a “social currency” [1]. The stability of this ratio stems from:

1. Payment Capacity Anchoring
   : Moutai’s price is anchored to the payment capacity of middle and high-income groups
2. Social Value Attribute
   : Excessively high prices will weaken its liquidity as a social medium
3. Cultural Symbol Significance
   : Prices need to maintain a certain degree of scarcity and symbolic meaning

• China’s economy is in a critical period of transformation and upgrading in 2025, and consumption shows a cautious trend overall [1]
• The middle-income group is expected to increase to 550-600 million people during the “14th Five-Year Plan” period, with an annual growth rate of about 3% [1]
• The compound annual growth rate of per capita disposable income of urban residents is 6.55% [1]

• Inventory pressure in high-end liquor has increased; industry inventory was about 2-3 months in the first half of 2025 [1]
• Some mid-to-high-end products have experienced price inversion [1]
• Changes in the structure of consumption scenarios; traditional business consumption has been affected to some extent

Moutai’s financial performance is “high profit, low risk, stable growth”; its revenue growth rates in the past three years were 11.72%, 16.53%, 18.04% respectively, and net profit growth rates were 15.20%, 19.55%, 19.16% respectively [1].

Moutai remains the top distilled liquor brand globally; core products contribute over 80% of revenue, and its market share and brand influence far exceed competitors [1].

With the expansion of the middle-income group and consumption upgrading, Moutai as a high-end consumer product still has sufficient growth space.

Industry demand weakened in Q2 2025; Moutai adjusted product structure and delivery rhythm to ease channel pressure [1].

Consumption tax reform or stricter alcohol prohibition orders may suppress valuation, but Moutai can partially pass on costs with its high gross margin [1].

Wuliangye, Luzhou Laojiao, etc. are accelerating their layout in the high-end market, which may divert some business consumption demand [1].

Current PE (19.98x) and PB (6.98x) are both lower than historical median and industry average [0][1]; combined with high ROE and stable cash flow, there is a possibility of undervaluation.

If the historical range of 30%-50% is still valid, then the current low range of 25%-38% may indicate future regression opportunities.

Recent stock price performance is weak (down 8.02% in 1 year, down 19.17% in 3 years) [0], which may reflect the market’s excessive pessimism about short-term factors.

The trend of consumption downgrade may lead to the historical ratio range no longer being applicable.

Even if undervalued, valuation repair may take a long time window.

During economic transformation and upgrading, demand for high-end consumer products may face fluctuations.

For long-term investors, Moutai’s moat and fundamentals are still solid; the current valuation level is somewhat attractive. The wage ratio range of 25%-38% may provide a certain margin of safety.

In the short term, it is still necessary to watch the recovery of industry demand and the progress of channel inventory digestion; excessive optimism is not advisable.

The investment logic of Moutai liquor price to wage ratio still holds in the long term, but more caution is needed in the short term. The range of 25%-38% does imply a certain possibility of undervaluation, but investors need to balance long-term value and short-term risks.

[0] Gilin API Data
[1] Guizhou Moutai Valuation Analysis: A Multi-Dimensional Framework for Judging Stock Undervaluation - Gilin AI (https://www.gilin.com.cn/essence0711924.html)
[2] Guosen Securities Research Report - Guizhou Moutai (600519.SH) Q2 2025 Revenue Grew 9.2% YoY (https://pdf.dfcfw.com/pdf/H3_AP202508131726808000_1.pdf?1755107023000.pdf)
[3] KPMG H1 2025 Consumer and Retail Industry Analysis (https://assets.kpmg.com/content/dam/kpmg/cn/pdf/zh/2025/08/consumer-and-retail-industry-analysis-2025-h1.pdf)