Kweichow Moutai (600519)

Equity Research 23 August 2026 | 11:53PM HKT

Kweichow Moutai (600519.SS): 1H26 briefing message: Prioritizing sell-thru & price stability over NT growth; DTC reform on track; Buy

Kweichow Moutai hosted a 1H26 earnings briefing on Aug 21. Mgmt views the Leaf Liu | current spirits downturn as a combination of cyclical destocking and structural Goldman Sachs (Asia) L.L.C.

changes in consumer behavior/distribution, and reiterated the DTC strategy of its Christina Liu | 2026 market-oriented reform. While 2Q26 reported performance was soft, mgmt Goldman Sachs (Asia) L.L.C.

attributed this mainly to deliberate product/channel adjustments rather than a sharp Valerie Zhou | deterioration in retail-end demand, with overall sell-through remaining positive yoy Goldman Sachs (Asia) L.L.C. and channel inventory stayed healthy (monthly inventory-to-sales ratio below 1x).

n Volume/price: More volume disciplined by sell-through and ASP normalization continues. Mgmt mentioned overall Moutai spirits volume increased in 1H26, while the reduced contribution from higher-ASP non-standard products led to a lower blended ASP and weighed on revenue/profit growth. Mgmt views the resulting normalization in revenue per tonne as part of the reform rather than an indication of weakening brand equity. On pricing, Moutai has completed five dynamic price adjustments over the past seven months, replacing the previous suggested retail price framework with a more market-oriented pricing mechanism. Since August 8, all 42 directly-operated stores nationwide have opened sales to general consumers at market-based retail prices. Mgmt noted that the price system is now broadly aligned with underlying consumer demand, with market prices remaining relatively stable over the past seven months. n On products, the company has returned to a clearer pyramid portfolio, with Feitian and other formats at the base, Jingpin/Zodiac products in the middle, and aged/cultural products at the top. No additional products outside the planned portfolio will be launched this year. Jingpin’s positioning as the company’s second-largest flagship SKU remains unchanged, with more than half of its FY26 sales target completed in 1H. For series liquor, the company will remain disciplined on shipments and emphasized allocation based on real sell-through. Moutai 1935 will see no incremental allocation beyond existing contracts, of which close to 80% has been executed, with the focus shifting to shipment control and price stabilization. n i-Moutai becoming the key anchor of Moutai’s DTC reform: i-Moutai continued to scale rapidly in 1H26, generating Rmb40.26bn of ex-VAT revenue,

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Goldman Sachs Kweichow Moutai (600519.SS)

+274% YoY and equivalent to 43.6% of group revenue. The platform added 17.44mn users in 1H26, bringing cumulative registered users to 96.91mn and cumulative active users to 29.41mn. More than 4.12mn consumers completed purchases through over 7.8mn orders during the period. Importantly, i-Moutai is also becoming a key tool for younger-consumer engagement with 44.4% of users aged below 35 years old and another 30.9% are aged 35-45. Mgmt plans to increase product availability windows on the platform to further improve accessibility. n Inventory remains healthy and 2Q softness reflects active channel adjustment: Mgmt attributed the weaker 2Q performance to a combination of the traditional low season and deliberate channel/product adjustments. Lower contribution from high-ASP non-standard Moutai products diluted blended ASP, while series liquor shipments were proactively reduced to protect channel economics. Despite weaker reported revenue, mgmt noted that underlying…