Dongxing Securities: Lowered the target price for Kweichow Moutai to 1716.95 yuan, with a buy rating.

Dongxing Securities Co., Ltd.’s Meng Sishu and Wang Jieting recently conducted research on Kweichow Moutai and issued a research report titled “Price Hike Review: Another Attempt at the Price Marketization Reform; the Price Hike Further Boosts Earnings.” They cut their target price for Kweichow Moutai to 1716.95 yuan and give a “Buy” rating.

Kweichow Moutai (600519)

Company announcement: effective March 31, 2026, the sales contract price of Feitian 53%vol 500ml Kweichow Moutai liquor (2026) under the distribution contract will be adjusted from 1169 yuan per bottle to 1269 yuan per bottle, and the suggested retail price in the self-operated system will be adjusted from 1499 yuan per bottle to 1539 yuan per bottle. This is another major measure on Moutai’s pricing mechanism, following the start of selling Pu’er-style Maotai (Pu Maotai) on iMoutai early this year, after the company lowered retail prices for non-standard products such as精品 (boutique items) and生肖 (zodiac) items.

Expected to boost 2026 performance by 26%. Based on our assumptions, in 2025, the overall proportion of Feitian Moutai in sales revenue is around 50%, with the direct-operated and distributor segments each accounting for about half. Considering the assumed incremental Feitian Moutai in 2026 and the incremental direct-operated channel, we roughly estimate that this price hike will increase revenue by 2.5%. The policy begins to be implemented starting 2026Q2. By 2026Q1, the shipment progress has basically been completed at around one-third of the full-year level. Therefore, the actual impact of this price hike on revenue is 1.5%.

Self-operated system also sees synchronized price increases; the price hike is expected to be carried out and implemented. According to today’s liquor prices—quotations for March 30, 2026—Feitian Moutai loose-box price for 2026 is 1545 yuan per bottle. There remains a price gap of 276 yuan per bottle versus the adjusted ex-factory price. At the same time, this price hike also raised prices in the self-operated system, which is expected to provide support for Moutai’s spot/secondary retail quotation. From the standpoint of distributors, the price hike narrows channel profits, but after the hike Feitian Moutai is still expected to be sold at standard price (顺价). This price hike is expected to be carried out and implemented.

Another attempt at Moutai’s price marketization reform. The significance of this price hike’s 核 意義 goes beyond a one-time increase in prices; more importantly, the pricing mechanism from the early “market-oriented operation 案” is starting to be substantively implemented. In January 2026, the company clearly proposed that the suggested retail price in the self-operated system would follow a dynamic adjustment mechanism described as “move with the market, relatively stable,” and it uses the self-operated retail price as the basis to calculate the channel profit margin, thereby determining the sales contract price and commission. The contract price is adjusted in sync with the self-operated retail price, indicating that the company is shifting from “administrative-style price hikes” to “mechanism-based price adjustments.”

Investment recommendation: Moutai’s excellent performance in product launch and sales during this year’s Spring Festival shows the ability of Feitian Moutai to maintain stable demand release at the 1499 price level, and it also becomes the foundation for Moutai to steadily ride through economic cycles. We like the trend and capability of leading liquor companies to continuously increase concentration in the high-end liquor market. We forecast that in 2026 the company will achieve sales revenue growth of 2.47%, and attributable net profit growth of 3.69%, corresponding to EPS of 74.65 yuan. The current share price implies a valuation of 19.02x. Combined with the historical valuation of the baijiu sector and the company’s position in the industry, we give a target valuation of 23x, with a target price of 1716.95 yuan and a rating of “Strong Buy.”

Risk warning: macroeconomic recovery falls short of expectations, overall demand recovery for baijiu falls short of expectations, major deficiencies in company management, and so on.

Latest earnings forecast details are as follows:

Within the past 90 days, 24 institutions have issued ratings for this stock, including 20 Buy ratings, 3 Increase ratings, and 1 Neutral rating; over the past 90 days, the institutions’ average target price was 1917.13.

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