KWEICHOW MOUTAI(SH:600519) Sou Hu Cai Jing·2025-11-02 05:03Core Viewpoint - Kweichow Moutai's recent stock buyback and share repurchase actions indicate a response to declining stock prices and market confidence, raising questions about the company's long-term performance and market strategy [1][3][5]. Group 1: Buyback and Shareholding Actions - Kweichow Moutai announced its first-ever stock buyback, investing 6 billion yuan to repurchase shares, which were subsequently canceled, reducing the total share capital and increasing the value of remaining shares [1][3]. - The major shareholder, Moutai Group, plans to increase its stake by 3 to 3.3 billion yuan, signaling confidence in the company's future despite recent stock price declines from 2600 yuan to around 1200 yuan [3][5]. - The timing of the buyback coincided with a significant drop in stock price, raising suspicions about whether this move reflects genuine confidence or a desperate attempt to stabilize the market [5][7]. Group 2: Financial Performance and Concerns - For the first three quarters of 2025, Kweichow Moutai reported revenue of 130.9 billion yuan, a growth of 6.32%, and a net profit of 64.6 billion yuan, up 6.25%, but the growth rate has significantly slowed, with Q3 revenue growth at only 0.35% [9][11]. - The company's product line shows uneven performance, with Moutai liquor revenue increasing by 7.26%, while series liquor sales plummeted by 34%, indicating a failure to establish a second growth curve [11][13]. - The wholesale channel saw a 14.39% increase, but direct sales dropped by 14.87%, with the once-promising "i Moutai" revenue halving, suggesting reliance on distributors for performance rather than direct sales [11][15]. Group 3: Industry Context and Challenges - The challenges faced by Kweichow Moutai reflect broader issues within the Chinese liquor industry, which is experiencing a downturn characterized by reduced consumption and high inventory levels [13][15]. - High-end liquor prices are under pressure, with competitors like Wuliangye and Luzhou Laojiao seeing significant price drops, indicating a tough market environment [15][17]. - Despite a 38% market share for top brands, the sustainability of Kweichow Moutai's premium pricing and brand reputation is in question if high-end consumption does not recover [15][17].