In-Depth Analysis of Valuation and Earnings Growth Matching for Kweichow Moutai (600519)

Now let me write a detailed analysis report for you based on all collected data:

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Indicator	Value	Assessment
Current Stock Price	RMB 1,373.55	In the low range of the past year
Price-to-Earnings Ratio (P/E)	19.11x	At a historical low
Price-to-Book Ratio (P/B)	6.69x	Moderate
5-Year Historical Revenue CAGR	20.0%	Excellent
2025E Revenue Growth Rate	5.3%	Significant slowdown
2025E Net Profit Growth Rate	4.9%	Notable slowdown
ROE	36.48%	Outstanding

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Scenario	Valuation	Comparison with Current Price	Assessment
Conservative Scenario	RMB 1,173.54	-14.6%	Below current price
Base Case Scenario	RMB 1,734.26	+26.3%	Reasonably undervalued
Optimistic Scenario	RMB 2,928.37	+113.2%	Significantly undervalued
Probability-Weighted	RMB 1,945.39	+41.6%	Medium-term value range

• Base case scenario uses 5-year historical average:
  20.0% revenue growth
  , 79.1% EBITDA margin
• Conservative scenario assumption:
  0% revenue growth
  (extreme stress test)
• Current market expectations are even more conservative (only 5-6% growth in 2025)

Historical data shows that Moutai’s valuation has contracted significantly [0][1]:

Year	P/E Valuation	Net Profit Growth Rate	Reason for Valuation Contraction
2020	45.2x	13.3%	Premium from high growth expectations
2021	38.5x	12.3%	Valuation begins to normalize
2022	35.2x	19.4%	Earnings support valuation
2023	28.5x	19.0%	Shift in market sentiment
2024	22.1x	15.5%	Industry pressure
2025(Current)	19.1x	~5%	Significant downward revision of growth expectations

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From 2020 to 2024, Moutai maintained steady growth momentum [0]:

• Revenue CAGR
  : Approximately 15-18%
• Net Profit CAGR
  : Approximately 15-20%
• Gross Margin
  : Remained at an extremely high level of over 90%
• Net Margin
  : Stayed above 50%
• ROE
  : Maintained above 30% for a long time

Recent earnings growth has slowed significantly, mainly affected by the following factors:

1. Macroeconomic pressure
   : Reduction in business consumption scenarios
2. Industry cycle adjustment
   : The liquor industry is under overall pressure
3. Price system pressure
   : The price of Feitian Moutai has fallen from a high to the RMB 1,499 threshold
4. Channel inventory pressure
   : High industry inventory levels
5. Consumption structure change
   : Shift in preferences of young consumers

Indicator	2025E	2026E	2027E
Operating Revenue	RMB 183.3 billion	RMB 184.3 billion	RMB 186.1 billion
Revenue Growth Rate	+5.3%	+0.5%	+1.0%
Net Profit Attributable to Shareholders	RMB 90.5 billion	RMB 90.5 billion	RMB 91.8 billion
Net Profit Growth Rate	+4.9%	0.0%	+1.4%

Data Source: Forecasts from Guosen Securities, CICC and other institutions [1][2]

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The PEG ratio is a core indicator for measuring the matching degree between valuation and growth:

Year	P/E	Net Profit Growth Rate	PEG	Assessment
2020	45.2x	13.3%	3.40	Severely overvalued
2021	38.5x	12.3%	3.13	Significantly overvalued
2022	35.2x	19.4%	1.81	Slightly overvalued
2023	28.5x	19.0%	1.50	Slightly high
2024	22.1x	15.5%	1.43	Close to reasonable
2025E	19.1x	4.9%	3.90	Seems overvalued

If we use the 2025E 4.9% growth rate, the current 19.1x P/E corresponds to a PEG of approximately 3.9, indicating that the valuation seems high relative to short-term growth. However, when considering Moutai’s brand moat, stable cash flow, and 75% dividend payout ratio, the valuation logic needs to be re-examined.

Indicator	Moutai	Industry Average	Assessment
P/E (TTM)	19.1x	Approximately 25-30x (Liquor Sector)	Relatively undervalued
P/B	6.69x	Approximately 8-10x	Relatively reasonable
EV/OCF	19.49x	-	Moderate
Dividend Yield (Forecast)	Approximately 4%	Approximately 2-3%	Relatively high dividend

1. Short-term Perspective (Within 1 Year)
   : - Earnings growth is expected to slow to around 5% - The current 19.1x P/E corresponds to a high PEG - However, considering the 4% dividend yield and 75% payout ratio, the valuation has support

2. Medium-term Perspective (2-3 Years)
   : - Moutai is promoting
   market-oriented transformation and reform
   [1][2] - The proportion of direct sales channels is increasing (expected to exceed 50%) - Accelerated international layout (Overseas revenue +37.53% YoY in Q1) - Probability-weighted DCF valuation shows 41.6% upside potential

3. Long-term Perspective (Over 5 Years)
   : - The historical 20% revenue CAGR is unsustainable - However, the brand premium and industry leading position are solid - Referring to the valuation of leading liquor companies in mature markets (15-20x P/E), Moutai’s valuation is becoming reasonable

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Institution	Rating	Target Price	Corresponding Valuation	Core Logic
CICC	Outperform	RMB 1,860	25.7/25.4x P/E for 2026/2027	Market-oriented transformation consolidates pricing power
Guosen Securities	Outperform the Market	-	19.1x P/E for 2026	Improved channel profits, dividend yield provides support
Huatai Securities	-	-	-	Focus on Spring Festival sales performance

The current stock price corresponds to approximately 19x P/E for 2026, and coupled with a 4% dividend yield, it has a good margin of safety. CICC’s target price of RMB 1,860 implies a 34.6% upside potential [1].

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Price Range	Valuation Status	Operation Suggestion
< RMB 1,200	Significantly undervalued	Aggressively buy
RMB 1,200 - RMB 1,500	Reasonably low	Accumulate on dips
RMB 1,500 - RMB 1,800	Reasonable range	Hold and observe
> RMB 1,800	Slightly overvalued	Moderately reduce positions

1. Macroeconomic risk
   : Sustained weakness in business consumption
2. Price risk
   : Further fluctuations in wholesale prices
3. Policy risk
   : Changes in policies such as consumption tax
4. Risk of earnings falling short of expectations
   : Q3 FY2025 has already missed expectations

• ✅
  Valuation has contracted significantly
  : From 45x P/E in 2020 to the current 19x
• ✅
  Earnings growth has slowed
  : But still maintains positive growth with high quality
• ✅
  Dividend yield provides support
  : The 4% dividend yield is attractive in an interest rate downward cycle
• ✅
  Positive reform expectations
  : Market-oriented transformation is expected to reshape the growth logic
• ⚠️
  Short-term PEG is high
  : Time is needed to digest the valuation

The current price has fully reflected market pessimistic expectations, and the matching degree between valuation and earnings growth is at a good level in recent years, making it worthy of medium-to-long-term allocation.

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[0] Jinling AI Financial Database - Kweichow Moutai real-time quotes, financial analysis, DCF valuation data

[1] CICC Research Report - “Kweichow Moutai (600519): The Company Launches Market-Oriented Transformation to Consolidate Pricing Power and Adapt to Changes” (January 19, 2026)

[2] Guosen Securities Research Report - “Kweichow Moutai (600519): Fully Promote Market-Oriented Transformation to Solve Supply and Demand Adaptation Issues” (January 2026)

[3] Eastmoney - “Kweichow Moutai 2025 Q2 Earnings Forecast and Market Analysis” (July 31, 2025)