Kweichow Moutai's third-quarter results shifted from decline to growth, with single-quarter profit growth returning to positive territory, offering a significant supporting signal for the baijiu sector that has been under sustained pressure. As the industry leader stabilizes, institutions broadly judge that the sector is in the final stages of a cyclical bottoming-out process.
On the evening of October 30, Kweichow Moutai Co.,Ltd. (ASX: 600519) disclosed its 2026 third-quarter report. The company recorded single-quarter operating revenue of 40.267 billion yuan in Q3, up 3.08% year-on-year; net profit attributable to shareholders reached 19.951 billion yuan, up 3.78% year-on-year and approximately 15% higher on a sequential basis. This reversed the downturn from the previous two quarters — in Q2, single-quarter revenue fell 5.23% year-on-year, and net profit attributable to shareholders dropped 6.9% year-on-year to 17.274 billion yuan.
For the first three quarters of 2026, the company posted operating revenue of 130.971 billion yuan, up 1.96% year-on-year; net profit attributable to shareholders of 64.467 billion yuan, down 0.25% year-on-year; and non-recurring net profit of 64.325 billion yuan, down 0.55% year-on-year. Open Source Securities believes that the food and beverage sector has seen relatively thorough chip clearing, valuations sit at historically low levels, and market expectations remain subdued — the combination of these three characteristics significantly highlights the sector's defensive attributes.
On the day the earnings report was released, A-share baijiu stocks rallied collectively, with Luzhou Laojiao hitting the daily limit in late trading, Shanxi Fenjiu surging over 8%, and Kweichow Moutai gaining more than 2%.
Single-Quarter Growth Turns Positive, Cumulative Profit Roughly Flat
From a quarterly perspective, Moutai's Q3 performance recovery trend is becoming clearer. Single-quarter operating revenue of 40.267 billion yuan and net profit attributable to shareholders of 19.951 billion yuan both posted year-on-year growth rates higher than the cumulative first-three-quarter levels, indicating a rebound in sequential momentum.
Looking at the first nine months, net profit attributable to shareholders declined 0.25% year-on-year, while non-recurring net profit fell 0.55% year-on-year. Total profit reached 8.902 billion yuan (cumulative for the first three quarters), also down 0.43% year-on-year.
Basic earnings per share for the first three quarters stood at 51.53 yuan, flat compared with the same period last year; weighted average return on net assets was 24.47%, down 0.17 percentage points from the same period a year earlier.
Operating Cash Flow Improves Sharply, Mainly Due to Finance Company Business Adjustment
Despite pressure on the profit side, Moutai's net cash flow from operating activities for the first three quarters reached 84.059 billion yuan, a substantial 120.07% year-on-year increase, nearly doubling from 38.197 billion yuan in the same period last year.
The company explained in its quarterly report that this change mainly stemmed from the maturity and recovery of interbank deposits that cannot be withdrawn at any time by its controlling subsidiary, Guizhou Moutai Group Finance Co., Ltd., as well as changes in the net increase in deposits absorbed from member units of the group company. This represents cash inflows arising from business structure adjustments at the finance company rather than substantive improvements at the core operating level.
As of September 30, 2026, Moutai's total assets stood at 318.305 billion yuan, up 4.76% from the beginning of the year; net assets attributable to shareholders of the listed company reached 271.205 billion yuan, up 10.86% from the beginning of the year.
Direct Sales Channel Dominates, Dealer Count Edges Lower
In terms of revenue structure, among the main business revenue of the Moutai liquor series in the first three quarters, Moutai liquor contributed 112.925 billion yuan, while the series liquor contributed 17.969 billion yuan. On the channel side, direct sales generated 71.274 billion yuan, wholesale agency generated 57.120 billion yuan, domestic market revenue reached 129.253 billion yuan, and overseas market revenue was 1.641 billion yuan.
In terms of digital marketing, the company generated 58.562 billion yuan in tax-exclusive liquor revenue through the "iMoutai" platform in the first three quarters, with the direct sales channel remaining an important revenue source.
Regarding dealer numbers, the company had 2,285 domestic dealers at the end of the reporting period, a net decrease of 68 from the beginning of the year, mainly reflecting adjustments among series liquor dealers; overseas dealers numbered 124, a net decrease of 2 from the beginning of the year.
Institutions: Bottom Signals for the Industry Have Emerged
Regarding the subsequent trajectory of the baijiu industry, institutions generally maintain a bottom-fishing allocation logic. Open Source Securities stated that the food and beverage sector has seen relatively thorough chip clearing, valuations sit at historically low levels, and market expectations remain subdued — the combination of these three characteristics significantly highlights the sector's defensive attributes.
CITIC Securities believes that the baijiu sector is currently in the late stage of cyclical bottoming and the final phase of clearing, with bottom signals already visible in prices, inventory, and expectations. Looking ahead to 2027, it judges that supply and demand in the baijiu industry are expected to achieve a new equilibrium — demand is likely to see a weak recovery under macroeconomic catalysts and a low base, while supply is expected to contract further but competition will intensify. Over the long term, the industry is expected to steadily enter a phase of benign repair. Although there is still some pressure on the domestic demand side at present, current valuations have already priced in considerable pessimistic expectations for the industry's medium- to long-term development. Considering that the baijiu sector now possesses strong dividend value and potential expectation gaps from a future shift in demand expectations, it is recommended to increase allocation to leading liquor companies at the industry bottom.
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