KWEICHOW MOUTAI(SH:600519) Huachuang Securities·2024-08-09 02:01Investment Rating - The report maintains a "Strong Buy" rating for Guizhou Moutai (600519) with a target price of 2600 CNY [3][16]. Core Insights - The mid-year report conveys confidence and includes a commitment to dividends, promising a total cash dividend of no less than 75% of the annual net profit for the years 2024-2026 [16]. - For the first half of 2024, total revenue reached 83.45 billion CNY, a year-on-year increase of 17.6%, while net profit attributable to shareholders was 41.7 billion CNY, up 15.9% [16]. - The report highlights a significant increase in revenue and profit, driven by price adjustments in traditional channels, although this has led to a decrease in direct sales proportion [16]. Financial Performance Summary - For Q2 2024, total revenue was 36.97 billion CNY, reflecting a 17.0% year-on-year growth, and net profit was 17.63 billion CNY, up 16.1% [16]. - The report notes that the production of Moutai liquor and series liquor decreased by 12.3% and 5.4% respectively, attributed to production scheduling affected by seasonal factors [16]. - The cash flow quality is highlighted as strong, with cash receipts increasing by 22.6% in Q2, outpacing revenue growth [16]. Dividend Policy and Market Position - The commitment to a higher dividend payout ratio is seen as a significant move, enhancing the attractiveness of the stock with a current dividend yield of 3.75% [16]. - The report indicates that recent price adjustments have led to a recovery in market prices for Moutai products, establishing a solid foundation for the upcoming peak season [16]. - The report emphasizes that the company's ability to maintain pricing power and its strategic adjustments will be crucial in navigating market fluctuations [16]. Earnings Forecast - The report projects earnings per share (EPS) for 2024, 2025, and 2026 to be 70.30 CNY, 78.96 CNY, and 87.22 CNY respectively, with corresponding price-to-earnings (P/E) ratios of 20, 18, and 16 [16].