KWEICHOW MOUTAI(SH:600519)2025-04-21 05:09Investment Rating - The investment rating for Kweichow Moutai Company Ltd. is Overweight [5][17]. Core Insights - The price target has been raised to Rmb1,810 from Rmb1,742, reflecting a 4% increase based on fine-tuned earnings forecasts and a DCF model rolled forward to 2025 [3][9]. - The bull case price target is now Rmb2,262, up from Rmb2,177, while the bear case price target has been adjusted to Rmb1,045 from Rmb1,005 [3][9]. Summary by Sections Sales and Earnings Forecast - The 2025 sales growth target for Moutai is set at 9%, with a slight increase in EPS estimates for 2025 by less than 1% and a decrease of approximately 1% for 2026-2027 [3][8]. - The projected EPS for fiscal years ending in December are as follows: 2025e at Rmb74.87, 2026e at Rmb81.64, and 2027e at Rmb91.10 [5][23]. Investment Drivers - Moutai's channel structure is considered one of the healthiest in the industry, which is expected to help the company manage growth targets prudently [15]. - Strong brand positioning is highlighted as a key factor, making Moutai one of the most valuable stocks in its sector [15]. Revenue and Profit Growth Projections - Revenue and net profit are projected to grow at a CAGR of 12% and 13% respectively in the bull case scenario for 2024-2026 [13]. - In the base case scenario, revenue and net profit are expected to grow at a CAGR of 10% and 9% respectively for the same period [14]. Price Target Methodology - The price target is based on a discounted cash flow methodology with key assumptions including an 11% WACC and a 2% long-term growth rate [9].