Kweichow Moutai (600519.SS) 3Q25 Earnings Review Summary Company Overview - **Company**: Kweichow Moutai - **Ticker**: 600519.SS - **Reporting Period**: 3Q25 - **Report Date**: October 29, 2025 Key Financial Metrics - **Total Revenue**: Rmb39.8 billion, up 0.3% YoY - **Net Profit (NP)**: Rmb19.2 billion, up 0.5% YoY - **Moutai Spirits Revenue**: Rmb34.9 billion, up 7% YoY - **Series Spirits Revenue**: Rmb4.1 billion, down 34% YoY - **Direct Sales**: Rmb15.5 billion, down 15% YoY - **Wholesale Sales**: Rmb23.5 billion, up 14% YoY - **Net Profit Margin (NPM)**: 48.3%, up 0.1 ppt YoY - **Gross Profit Margin (GPM)**: 91.3%, up 0.2 ppt YoY Core Insights - **Sales Performance**: Moutai Spirits showed resilience with a 7% YoY growth, primarily driven by wholesale channels, while Series spirits faced a significant decline of 34% YoY due to policy impacts affecting upper mid-end spirits [1][2] - **Channel Dynamics**: Wholesale channel sales increased by 14% YoY, attributed to expedited shipments to distributors, while direct sales saw a decline of 15% YoY, with i-Moutai sales plummeting by 57% YoY [1][2] - **Direct Sales Contribution**: Direct sales accounted for 40% of total spirits sales in 3Q25, down from 43% in 2Q25 and 47% in 3Q24, indicating a shift in consumer purchasing behavior [1][2] - **Customer Advances**: Customer advances decreased by 22% YoY to Rmb7.75 billion, reflecting a less demanding prepayment pace amid anti-graft policy impacts [1][2][13] Additional Observations - **Expense Management**: Selling expense ratio was 3.1%, down 1.0 ppt YoY, likely due to a higher mix of Moutai spirits which require less marketing investment [2][10] - **Wholesale Price Trends**: The wholesale price of Original case Feitian Moutai decreased to Rmb1,700, which is approximately 29% of urban employee salary, indicating improved affordability compared to previous years [7][13] - **Future Outlook**: The company is expected to adjust its growth targets, now forecasting a 4% sales growth for 2025, down from an original target of 9% [7][8] Earnings Revision - **Earnings Forecast Adjustment**: Sales and NP growth estimates for 2025 and 2026 have been revised down by 1-2% due to weaker Series spirits and direct sales [8][24] - **Target Price**: The target price has been adjusted to Rmb1,691 from Rmb1,724 based on updated earnings estimates [8][24] Conclusion Kweichow Moutai's 3Q25 results reflect a mixed performance with strong wholesale growth offsetting declines in direct sales and Series spirits. The company is navigating policy challenges while maintaining profitability through effective expense management and strategic channel focus. Future growth targets are being recalibrated in response to market conditions.

Summary of Wuliangye Yibin (000858.SZ) 2Q25 Conference Call Company Overview - **Company**: Wuliangye Yibin (000858.SZ) - **Industry**: Spirits and Alcoholic Beverages Key Financial Results - **1H25 Performance**: - Total revenue increased by **4.2%** year-over-year (yoy) to **Rmb52.8 billion** - Net profit rose by **2.3%** yoy to **Rmb14.6 billion** [1][4] - **2Q25 Results**: - Total revenue of **Rmb15.8 billion**, a slight increase of **0.1%** yoy - Net profit of **Rmb4.6 billion**, a decrease of **7.6%** yoy [1] - **Operating Margins**: - Operating profit margin (OPM) at **35.4%**, net profit margin (NPM) at **29.3%**, both below estimates [1] Sales Performance - **Spirits Sales**: - Wuliangye Spirits sales grew by **4.6%** to **Rmb41.0 billion** - Series spirits sales increased by **2.7%** to **Rmb8.1 billion** [1][11] - **Volume and Average Selling Price (ASP)**: - Wuliangye Spirits volume up **12.7%**, ASP down **7.2%** - Series spirits volume up **58.8%**, ASP down **35.3%** [1][11] Customer Advances and Distribution - **Customer Advances**: Increased to **Rmb10.1 billion**, up **24%** yoy [1][10] - **Distributor Contribution**: Top 5 distributors contributed **Rmb30.1 billion**, representing **57%** of overall sales in 1H25, up from **21%** in 1H24 [1] Market Dynamics - **Channel and Brand Strength**: Resilience attributed to strong channel and brand power, market share gains in banquet scenarios, and channel reforms initiated in early 2025 [2] - **Wholesale Pricing**: Current wholesale price of the 8th Common Wuliangye is **Rmb860** per bottle, down **Rmb10** in the past two weeks [1] Margins and Expenses - **Gross Profit Margin (GPM)**: - Wuliangye Spirits GPM at **87.0%**, Series spirits GPM at **60.8%** [9] - **Selling Expenses**: Increased by **9%** yoy in 2Q25, impacting NPM [1] Valuation and Investment Outlook - **Current Valuation**: Stock trading at **15x** 2025 P/E with a **5%** dividend yield [2] - **Price Target**: 12-month target price set at **Rmb139**, indicating an upside of **9.8%** from current levels [17] - **Risks**: Potential consumption tax hikes, competition from Moutai-flavor brands, and intensifying competition in high-end spirits [15] Additional Insights - **Sales by Region**: East, South, and North regions reported sales of **Rmb20.1 billion**, **Rmb21.9 billion**, and **Rmb7.1 billion** respectively, with growth rates of **7.9%**, **1.9%**, and **1.8%** [11] - **Distributor Changes**: Number of distributors decreased to **3,587** from **3,711** at the end of 2024, while series distributors increased to **1,077** [11] This summary encapsulates the key points from the conference call, highlighting Wuliangye's financial performance, market dynamics, and investment outlook.