Kweichow Moutai (600519)

Equity Research 16 August 2026 | 2:04PM HKT

Kweichow Moutai (600519.SS): 2Q26 Review: Topline/NP slightly below mainly on Series Spirits but NPM better than GSE; i-Moutai beat GSE/as

Kweichow Moutai reported 1H/2Q26 financial results on Aug 14th with 1H26 total Leaf Liu | revenue up 1.3% yoy to Rmb92.3bn (c.3% below GSe) and net profit down 2.0% yoy Goldman Sachs (Asia) L.L.C.

to Rmb44.5bn (c.2% below GSe Rmb45.4bn). Implied 2Q26 total sales were down Christina Liu | 5.2% yoy to Rmb37.6bn, due mainly to weaker than expected Series Spirits sales Goldman Sachs (Asia) L.L.C.

(down 25% yoy in 2Q26 vs. +12% in 1Q26, vs. GSE of +3% in 2Q26) while Moutai Valerie Zhou | Spirits sales were slightly down 1% yoy vs. GSE of +1% in 2Q26, and implied 2Q26 Goldman Sachs (Asia) L.L.C. net profit was down 6.9% (vs. -2% by GSe) but OPM/NPM was slightly better than GSE mainly on better than expected GPM contraction (series spirits GPM down 3.6ppt in 1H26) partially offset by increase in admin expense ratio. The i-Moutai DTC platform sales reached Rmb18.7bn in 2Q26 (beating GSE of Rmb16.5bn, likely indicating c.4,700+ tons for Feitian Moutai and c.900+ tons for non-standard Moutai calculated by GSE), up 283% yoy, as 51% of total spirits sales (vs. 40% in 1Q26) with continued offering of Feitian Moutai as well as consignment sales model for non-standard Moutai SKUs (starting from end-March), demonstrating strong consumer demand for Moutai brand. The slight 1% decline of Moutai Spirits sales in 2Q26 was mainly due to still controlled release of non-standard SKUs under consignment models while we note the wholesale prices of Jingpin Moutai/Zodiac Moutai/Moutai 15Y were up 8%/7%/4% now vs. the beginning of 2026, as the outcome of the company’s market-oriented reform. Calculated adjusted total sales (adjusted for change in balances of customer advances) was up 3% in 2Q26 (vs. -1% in 1Q26), while operating cash flow increased by c. 10x in 2Q26 and also up 60% /74% vs. 2Q24/2Q23.

Despite of the slight miss in 2Q26, we remain constructive on the company‘s market-oriented reform that enhances direct consumer reach and keeps a healthy channel inventory/high turnover for wholesalers which will facilitate healthier S/D dynamics as well as more agile pricing actions in the future. Meanwhile we expect the recent multiple rounds of prices hikes (see summary table in Exhibit 1) to support growth acceleration in 2H26, and the potential sequentially moderating supply of Feitian Moutai into 2H26 will support wholesale prices level ahead of peak festival season (Mid Autumn on 25 Sept 2026). We slightly tweak our sales/NP estimates by c.2% and now expect 3%/4% sales/NP growth in 2H26, followed by a rebound to +8.3%/9.5% sales/NP growth in 2027 with supports from Feitian price hikes and normalization of non-standard Moutai/series spirits. The stock is trading at 19.8x/18.1x for 2026/27E P/E with 4% yield and high visibility. Reiterate Buy.

Earnings change: We revised down our 2026-28E sales forecasts within c.2%, mainly

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Goldman Sachs Kweichow Moutai (600519.SS)

on lowered 2026E series product sales growth, reflecting the likely softer 2Q shipments during the low season, while Moutai liquor remained largely steady (-1% yoy in 2Q vs. GSE +1%). We also raise our 2026E direct sales estimates following stronger-than-expected i-Moutai sales (Rmb18.7bn reported in 2Q vs. GSe of Rmb16.5bn/ Rmb11.4bn in 2Q/Apr-May), which now takes 66% of total spirits revenue for 2026E. We revised own our earnings forcasts for 2026E-2028E by 2.5%. We now look for c.2%/1% sales/NP growth in 2026E, while leaving our 2027/28E growth assumptions broadly unchanged. Moutai is…