KWEICHOW MOUTAI(SH:600519) CSC SECURITIES (HK) LTD·2025-08-13 06:30Investment Rating - The report assigns a "Trading Buy" rating for the company, indicating a potential upside of 5% to 15% from the current price [7][13]. Core Insights - The company reported a total revenue of RMB 91.09 billion for H1 2025, reflecting a year-on-year increase of 9.2%, with a net profit of RMB 45.4 billion, up 8.9% year-on-year [7]. - The revenue from the flagship product, Moutai liquor, accounted for 83% of total sales, while series liquor contributed 15% [3]. - The company is expected to maintain a stable growth trajectory, with projected net profits of RMB 94.83 billion, RMB 103.44 billion, and RMB 112.24 billion for 2025, 2026, and 2027 respectively, representing year-on-year growth rates of 10%, 9.1%, and 8.5% [11]. Financial Performance - For H1 2025, the gross margin remained stable at 91.46%, with a slight decline of 0.45 percentage points year-on-year [11]. - The company’s operating income for 2025 is forecasted to reach RMB 189.89 billion, with a net profit margin of approximately 50% [14]. - The earnings per share (EPS) for 2025 is projected to be RMB 75.49, with a price-to-earnings (P/E) ratio of 19 times [11][14]. Market Position - The company holds a significant market share in the liquor industry, with major shareholders including China Guizhou Moutai Distillery (Group) Co., Ltd., which owns 54.07% of the shares [2]. - Institutional investors hold 7.1% of the circulating A-shares, while general corporations account for 70.7% [4]. Sales Channels - Traditional sales channels generated RMB 493.4 billion in revenue for H1 2025, a year-on-year increase of 2.8%, while direct sales revenue reached RMB 400 billion, up 18.6% [11]. - The company is shifting its focus from a "channel-first" approach to a "consumer-first" strategy to enhance service quality and meet consumer demands for high-quality products [11].