KWEICHOW MOUTAI(SH:600519) Sou Hu Cai Jing·2025-09-21 12:09Core Viewpoint - The price of Moutai, once considered "liquid gold," has significantly declined due to multiple interrelated factors, leading to a historical low in wholesale prices and a shift in consumer behavior [1][5][18] Group 1: Price Decline and Market Dynamics - Since June 2024, the wholesale price of Moutai has dropped to 1770 RMB per bottle, marking a decline of over 20% from the previous price of 2220 RMB [1] - The market is experiencing a significant imbalance between supply and demand, with an estimated 120 million bottles of Moutai in circulation and new production capacity adding to the inventory [6] - The introduction of strict alcohol prohibition policies has drastically reduced the consumption of Moutai in government settings, decreasing its market share from 40% in 2012 to less than 0.8% [5] Group 2: Changing Consumer Preferences - The younger generation shows a declining interest in traditional liquor, with only 9% of Gen Z consuming Moutai, and 73% reducing their alcohol intake for health reasons [7] - The demand for Moutai as a gift has plummeted from 35% to 12%, while alternative beverages like whiskey and low-alcohol drinks are gaining popularity among younger consumers [7] Group 3: Impact of E-commerce and Financial Attributes - E-commerce platforms have disrupted traditional pricing structures, with aggressive pricing strategies leading to a significant drop in Moutai's market price [8][11] - The annualized return on Moutai has fallen below 5%, down from 18% between 2020 and 2024, causing investors to seek more stable assets [8] Group 4: Distributor Challenges and Industry Reactions - Distributors are facing unprecedented survival challenges, with some reporting losses of 500 RMB per bottle sold, leading to a crisis in the distribution network [10] - The price collapse has triggered a domino effect, causing other premium brands to lower their prices, with notable declines in brands like Wuliangye and Guojiao 1573 [10] Group 5: Strategic Responses and Future Outlook - Moutai is attempting to stabilize prices through various strategies, including increasing direct sales and targeting younger consumers with new product lines [17] - The company is also expanding its international market presence, with overseas revenue reaching 5.1 billion RMB in 2024, a 19.27% increase year-on-year [17] - The ongoing price adjustments reflect a re-evaluation of Moutai's position as a luxury item versus its fundamental value as a consumer product [18]