KWEICHOW MOUTAI(SH:600519) 3 6 Ke·2025-10-29 23:30Core Viewpoint - Kweichou Moutai achieved positive growth in Q3 2025 despite a challenging environment characterized by a "ban on alcohol" and weak demand, with revenue reaching CNY 39.81 billion, a year-on-year increase of 0.3%, which was below market expectations of CNY 42.5 billion [1][11]. Financial Performance - The company reported a net profit of CNY 19.22 billion in Q3 2025, reflecting a year-on-year growth of 0.6%, slightly outpacing revenue growth [4][11]. - Moutai liquor revenue reached CNY 34.9 billion, marking a year-on-year increase of 7.1%, although there was a downward trend compared to the previous two quarters [2][15]. Market Dynamics - The decline in demand was particularly pronounced in the gifting segment, indicating weak business demand from small and medium enterprises, while banquet demand showed a less significant decline [3][15]. - Series liquor revenue fell sharply to CNY 4.1 billion, a year-on-year decrease of 33.7%, attributed to high inventory levels and weak demand [3][17]. Channel Performance - Direct sales revenue decreased by 14.8% to CNY 15.6 billion, with the direct sales channel's share dropping to 40%, reflecting the weak demand at the terminal level [4][20]. - Contract liabilities decreased to CNY 7.8 billion, down 22% year-on-year, indicating a recovery from the previous quarter's steep decline [5][22]. Profitability Metrics - The overall gross profit margin slightly improved by 0.2 percentage points to 91.4%, driven by a higher proportion of Moutai liquor sales [4][25]. - The company reduced marketing expenditures, resulting in a sales expense ratio decline of 1 percentage point to 3.1%, while management expenses remained stable [4][25]. Industry Context - The current phase of the industry is characterized by a proactive reduction of inventory, with terminal sales beginning to show improvement, suggesting a potential bottoming out of the market [6][7]. - The market's expectations regarding Moutai's pricing have stabilized, indicating that short-term price fluctuations may have a muted impact on the company's valuation [6][7].