J.P. Morgan: Kweichow Moutai-A — 4Q25 Revenue/Earnings Down 19%/30%; Absence of FY26 Guidance Disappoints

J.P. Morgan notes that Kweichow Moutai's FY25 revenue and earnings fell 1.2 percent and 4.5 percent year over year, implying fourth-quarter declines of 19 percent and 30 percent, missing Bloomberg consensus by 5 percent and 8 percent. While the market had partially priced in weak FY25 results, the key negative surprise is the company's decision to suspend FY26 sales guidance, historically provided for the past decade. This may be interpreted as a lack of confidence in growth. J.P. Morgan estimates buy-side expectations for FY26 revenue growth at 0–5 percent, which seems achievable given potential Feitian price hikes and rising direct-channel contributions. The direct channel, primarily iMoutai, grew 13 percent in FY25 and 27 percent in 4Q25, now accounting for 50 percent of revenue. FY25 gross margin slipped 0.8 percentage points to 91.2 percent, while net margin fell 1.7 points to 48.8 percent. The company announced a RMB 35 billion final dividend, supplementing a RMB 30 billion interim payout and RMB 6 billion buyback, bringing total FY25 cash returns to RMB 71 billion at an 86 percent payout ratio. J.P. Morgan maintains an Overweight rating with a DCF-based target of RMB 1,930, equivalent to 24 times 2026 estimated earnings. Consensus FY26 forecasts face high-single-digit to double-digit downgrades.