Kweichow Moutai Co Ltd (600519) - Comprehensive analysis
Near-term macroeconomic headwinds have negatively impacted baijiu (clear liquor) demand and the sector’s profitability, resulting in slower year-over-year sales growth across all segments in recent quarters. We anticipate that sluggish baijiu sales will continue into 2025; however, demand for Moutai remains relatively strong. Moutai's unique cultural significance, unparalleled brand image, and exceptional product quality position it well to navigate the current challenges facing baijiu sales. These characteristics also enable it to capitalize on China's beverage premiumization trend in the mid- to long term. Furthermore, Moutai's commitment to increasing its regular dividend payout ratio to 75% from 51.9% over the past six years, through 2024-26, sends a positive signal to the market, which is likely to enhance shareholder returns and boost investor confidence. Our estimated dividend per share for 2025 is CNY 57.44, reflecting the 75% payout ratio.
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