Morgan Stanley: Kweichow Moutai (600519) 4Q25 Results — A Quarter of Further Destocking
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Morgan Stanley highlights that Kweichow Moutai (600519.SS) experienced its first annual decline since listing, with full-year 2025 sales falling 1% and net profit dropping 4.5%. In the fourth quarter, sales plunged 19% year-on-year while net profit tumbled 30%. Despite outperforming peers, these results reflect deliberate supply discipline across the industry since the second and third quarters of 2025, aimed at managing weak demand and channel destocking.
The firm expects a demand recovery beginning in the first quarter of 2026, bolstered by healthy Spring Festival consumption. Furthermore, a price increase for Feitian Moutai effective March 31 should alleviate pricing pressure on non-Feitian product lines. Notably, Moutai has adopted a more market-driven approach to channel and pricing management early in 2026, refraining from setting rigid internal targets. Industry-wide destocking is projected to persist through the first half of 2026, with gradual improvement anticipated in the second half.
Morgan Stanley maintains an Overweight rating with a target price of CNY 1,790, offering 22% upside from the closing price of CNY 1,462.84 on April 16, 2026. This valuation relies on a discounted cash flow model incorporating an 11% weighted average cost of capital and a 2% long-term growth rate. Key risks include fluctuations in premium baijiu consumption and wholesale pricing trends.