Core Viewpoint - The report from Tianfeng Securities indicates that Guizhou Moutai's performance in H1 2025 meets expectations, and the achievement of the annual target is likely [1] Financial Performance - In Q2 2025, revenue from Moutai liquor reached 32.032 billion yuan, while revenue from series liquor was 6.740 billion yuan, reflecting year-on-year changes of +10.99% and -6.53% respectively [1] - The revenue contribution from Moutai liquor increased by 2.61 percentage points year-on-year to 82.62% [1] Product Strategy - The increase in Moutai liquor's revenue share is attributed to the company's strategy of increasing the supply of 1L products in H1 2025 [1] - New product launches, including five "Walking Series" and "World Expo Commemorative Wine," are expected to contribute to revenue growth [1] International Market Expansion - Revenue from international markets in Q2 2025 grew by 27.64% year-on-year to 1.774 billion yuan, with its contribution to total revenue increasing by 0.72 percentage points to 4.58% [1] - The significant growth in overseas markets is linked to the company's intensified efforts in international market expansion since 2025 [1] Investment Rating - The report maintains a "Buy" rating for Guizhou Moutai [1]

Core Insights - The company reported its 2025 H1 financial results, showing a year-on-year increase in revenue and net profit [1] - The revenue contribution from Moutai liquor has increased, with direct sales channels showing significant growth [2] - There is a decline in contract liabilities and cash flow, but overall profitability remains stable [3] Financial Performance - For 2025 H1, the company achieved operating revenue of 893.89 billion, net profit attributable to shareholders of 454.03 billion, and net profit excluding non-recurring items of 453.90 billion, representing year-on-year growth of +9.10%, +8.89%, and +8.93% respectively [1] - In Q2 2025, the operating revenue was 387.88 billion, net profit attributable to shareholders was 185.55 billion, and net profit excluding non-recurring items was 185.40 billion, with year-on-year growth of +7.28%, +5.25%, and +5.23% respectively [1] Product and Channel Analysis - In Q2 2025, revenue from Moutai liquor reached 320.32 billion, while series liquor revenue was 67.40 billion, with Moutai liquor's revenue share increasing by 2.61 percentage points to 82.62% [2] - Direct sales revenue grew by +16.52% to 167.89 billion, while wholesale revenue increased by +1.48% to 219.83 billion, with direct sales accounting for 43.30% of total revenue [2] - The number of distributors increased by 192 to 2395, although the average scale per distributor decreased by -1.13% to 16.18 million [2] Market Expansion - Revenue from international markets increased by +27.64% to 17.74 billion, with its share rising by 0.72 percentage points to 4.58%, attributed to the company's efforts in expanding its international market presence [2] Profitability and Cost Management - In Q2 2025, the company's gross margin was 90.42% and net profit margin was 47.84%, showing a slight decline of -0.26 and -0.92 percentage points year-on-year [3] - Operating cash flow decreased by -84.29% to 43.10 billion, influenced by reduced deposits and increased statutory reserves [3] - Contract liabilities fell by -44.86 billion year-on-year to 55.07 billion, with cash sales in Q2 2025 amounting to 389.43 billion, down -4.64% year-on-year [3] Future Outlook - The company has slightly adjusted its revenue and profit forecasts for 2025-2027, expecting revenue growth of +9%, +7%, and +7% to reach 1903 billion, 2037 billion, and 2175 billion respectively, and net profit growth of +9%, +7%, and +6% to reach 943 billion, 1006 billion, and 1070 billion respectively [3]

Core Viewpoint - Kweichow Moutai has delivered a mid-year financial report that reflects both stability and pressure amid a challenging macroeconomic environment and industry adjustments [1] Financial Performance - In the first half of the year, total revenue reached 91.094 billion yuan, a year-on-year increase of 9.16%, while net profit attributable to shareholders was 45.403 billion yuan, up 8.89% [2] - In the second quarter, revenue was 38.788 billion yuan, showing a year-on-year growth of 7.28%, and net profit attributable to shareholders was 18.555 billion yuan, increasing by 5.25% [2] - Moutai's revenue from liquor sales was 75.6 billion yuan, reflecting a year-on-year growth of 10.4% [7] Market Environment - The macroeconomic and cyclical pressures in the liquor industry remain unchanged, particularly during the traditional off-season in the second quarter [3] - The company adopted a strategy of controlling volume and stabilizing prices, facing challenges from high inventory and cash flow pressures in the distribution channels [3][4] Sales and Distribution - The total contract liabilities decreased significantly from 10 billion yuan last year to 5.5 billion yuan, representing a year-on-year decline of 45% [3] - Actual sales revenue in the second quarter saw a year-on-year decline of 3.1%, aligning with a 4.6% drop in sales cash receipts [3] - The company is focusing on stabilizing the pricing strategy for its flagship product, Feitian Moutai, while optimizing channel and product structures to explore new growth opportunities [5] Product Strategy - Moutai has increased the market supply of 1L products and introduced new offerings such as the Snake Year Zodiac Moutai and the Shengle Feitian series to cater to diverse consumer demands [5][8] - The introduction of non-standard products and the sale of kilogram-packaged Feitian Moutai have partially mitigated the impact of volume control on the 500ml Feitian Moutai [6] Cash Flow and Financial Health - The company's operating cash flow net amount dropped significantly by 64.2%, from 36.6 billion yuan last year to 13.1 billion yuan [11] - This decline is attributed to reduced deposits from group member units and increased statutory reserves and non-withdrawable interbank deposits [12] Distribution Channels - Revenue from direct sales channels grew by 18.62% to 40 billion yuan, with iMoutai contributing 10.8 billion yuan, a year-on-year increase of 5% [9] - The number of domestic distributors reached 2,280, with a net increase of 137, marking a recent high [10]

Core Viewpoint - The recent fluctuations in the terminal price of Feitian Moutai have attracted significant attention, with online prices showing a decline while offline prices remain stable above 2100 yuan per bottle, indicating a strong demand in various consumption scenarios [2][3][4]. Price Trends - The current market price for Feitian Moutai is reported to be around 2100 to 2200 yuan per bottle, with some online platforms offering promotional subsidies that affect the displayed prices but not the actual market value [3][4]. - Offline channels continue to dominate the distribution of Feitian Moutai, with prices remaining stable despite fluctuations in online sales [3][4]. Consumption Patterns - There is an increasing trend in the consumption of Feitian Moutai at banquets and social gatherings, with reports indicating that a significant portion of sales is being opened for immediate consumption [6][7]. - The primary consumers of Feitian Moutai include private business owners and investors, who often purchase the product for both business and personal enjoyment [6][7]. Market Strategy - Moutai's strategy focuses on meeting consumer needs through a human-centered approach, which is essential for navigating the current market challenges [2][8]. - The company is adapting to the changing market by enhancing its product offerings and focusing on consumer experiences, aiming to provide a comprehensive product solution that aligns with consumer demands [9][10]. Industry Context - The Chinese liquor industry is currently experiencing a period of adjustment, with overall growth slowing down; however, Moutai remains confident in its brand value and product quality [8]. - Historical patterns show that Moutai has successfully navigated previous industry downturns by implementing proactive strategies, which it continues to do in the current cycle [8].

Investment Rating - The report maintains an "Increase" rating for the food and beverage industry, indicating a positive outlook for the sector [5]. Core Insights - The beer and beverage sector is entering a peak season, with a focus on new product launches in mass-market segments. The report highlights three main lines for investment in liquor: leading brands, high-certainty regional brands, and flexible targets benefiting from recovery and risk appetite [1][2]. - The report emphasizes the importance of product innovation and quality in driving growth for companies like Yanjing Beer and Nongfu Spring, particularly in the beverage segment [3][4]. Summary by Sections Liquor Industry - Guizhou Moutai has launched a new product series, enhancing its cultural product structure and international expansion. The liquor market is stabilizing as inventory adjustments continue, providing long-term investment opportunities in leading stocks [2]. Beer and Beverage Sector - Yanjing Beer is implementing multiple strategies to drive U8 growth, including product quality differentiation and market penetration. Nongfu Spring has introduced a new carbonated drink, indicating ongoing competition in the beverage industry, which is expected to maintain high growth due to improved consumer scenarios [3]. Mass-Market Products - The report notes that Sam's Club is accelerating new product launches, which benefits companies that maintain high quality and innovation. The change in accounting for a subsidiary by Haoxiangni may lead to short-term profit fluctuations but could enhance asset value in the long run [4].