KWEICHOW MOUTAI(SH:600519)2026-01-14 05:05Kweichow Moutai (600519.SS) Conference Call Summary Company Overview - Company: Kweichow Moutai - Stock Code: 600519.SS - Industry: Spirits Key Points Market-Oriented Operation Plan - Kweichow Moutai announced a shift to a more market-driven pricing framework to optimize channel investments and safeguard profitability, focusing on demand dynamics [1] - The new strategy includes: 1. Adjusting product portfolio to a pyramid structure by pricing tier 2. Transitioning from a traditional sales model to a multi-dimensional model including direct sales, distribution, agency, and consignment 3. Expanding sales channels to include online, offline retail, restaurants, and private VIP clients 4. Implementing a market-oriented pricing system for various sales models [1] Pricing Adjustments - Suggested retail prices (RSP) for key SKUs: - Feitian Moutai vintage (2019-2024): Rmb1,909 to Rmb2,659 per bottle - Feitian Moutai 2026: Rmb1,499 per bottle - Non-standard Moutai SKUs: RSP cut by approximately 20-30% [1] - Ex-factory prices for distributors of key non-standard Moutai products reduced by 7-37% [1] Impact on Channel Profitability - Price adjustments are expected to stabilize the wholesale price system, boost distributor confidence, and improve market supply/demand dynamics [2] - Estimated channel margins for Jingpin Moutai and Moutai 15-Year now approach 20% following the adjustments [2] - The adjustments are anticipated to expand market share and consumer base for strategic SKUs, solidifying flagship products' market status [2] Sales Volume and Earnings Revisions - Sales estimates revised down by 5-9% for 2025-2027, primarily due to lower Moutai spirits volume and softer ASP trends [7] - Expected sales/NP decline of -1%/-2% in 2025 and -1%/-1% in 2026 [7] - The 12-month price target is revised down to Rmb1,553 from Rmb1,691, maintaining a "Buy" rating [7] Theoretical Sales Impact Analysis - The pricing and volume quota adjustments could imply up to Rmb30 billion sales reduction in 2026 [6][12] - Improved supply/demand dynamics and better product affordability are expected to create favorable conditions for wholesale price recovery and retail sales rebound in the second half of 2026 [6] Product Matrix Strategy - Moutai is restructuring its product offerings into a pyramid structure: 1. Base tier: Feitian Moutai 500ml 2. Mid tier: Jingpin and Zodiac 3. Apex tier: Vintage spirits with controlled shipments to enhance value [17] Channel Strategy - Moutai is developing five parallel sales channels: wholesale, offline retail, online retail, catering, and private traffic, focusing on an integrated online and offline transformation [21] Risks and Challenges - Key risks include potential regulatory changes, environmental concerns, slower macroeconomic recovery, capacity constraints, and volatility in US interest rates [37] Conclusion - Kweichow Moutai's strategic shift towards a market-oriented pricing model and channel expansion aims to enhance profitability and market share amidst changing consumer dynamics and industry cycles [2][20]