Dongxing Securities Corporation Limited analysts Meng Sishuo and Wang Jieting recently conducted research on Kweichow Moutai Co.,Ltd. and released a report titled "Price Increase Review: Another Step in Price Marketization Reform, Boosting Performance Further." The report lowers the target price for Kweichow Moutai to 1716.95 yuan while reiterating a Buy rating. Kweichow Moutai (600519) announced that, effective March 31, 2026, the contract price for Feitian Moutai 53% vol 500ml (2026) will be adjusted from 1169 yuan per bottle to 1269 yuan per bottle, and the self-operated system retail price will be adjusted from 1499 yuan per bottle to 1539 yuan per bottle. This move represents another significant step in the company's pricing mechanism, following earlier actions this year such as selling standard Moutai on the i-Moutai platform and reducing retail prices for premium and special edition products. These measures are expected to enhance the company's 2026 financial performance.
Based on estimates, Feitian Moutai accounted for approximately 50% of total sales revenue in 2025, with direct sales and distributor channels each contributing about half. Considering assumptions of increased Feitian Moutai volume and growth in the direct sales channel for 2026, a preliminary calculation suggests this price adjustment could boost revenue by approximately 2.5%. As the policy takes effect from the second quarter of 2026, and considering that shipments for the first quarter typically account for about one-third of the annual total, the actual impact on revenue from this price increase is estimated to be around 1.5%.
The simultaneous adjustment of prices in the self-operated system is expected to support the implementation of the new pricing. According to a quote from Jinri Jiujia on March 30, 2026, the market price for 2026 Feitian Moutai (case) was reported at 1545 yuan per bottle. This still leaves a difference of 276 yuan per bottle compared to the adjusted ex-factory price. The coordinated increase in the self-operated system's prices is anticipated to provide support for Moutai's wholesale prices. From the perspective of distributors, the price hike narrows channel profit margins; however, Feitian Moutai remains profitable at the new price level, which supports the likelihood of the new prices being effectively implemented.
This price adjustment signifies more than a one-time increase; it marks the substantive implementation of the pricing mechanism outlined in the "Market-Oriented Operation Plan" introduced earlier this year. In January 2026, the company explicitly stated that retail prices in the self-operated system would follow a dynamic adjustment mechanism based on market conditions while maintaining relative stability. The self-operated retail price serves as the basis for calculating channel profit margins, which in turn determines the sales contract price and commissions. The synchronized adjustment of the contract price and the self-operated retail price indicates the company is transitioning from "administrative price hikes" to a "mechanism-based pricing approach."
Regarding investment advice: Kweichow Moutai's strong sales performance during the recent Spring Festival demonstrated the stable demand for Feitian Moutai at the 1499 yuan price point, underscoring the company's ability to navigate economic cycles steadily. The outlook is positive for leading liquor enterprises enhancing their market concentration and capabilities in the premium segment. Forecasts for 2026 project a 2.47% increase in the company's sales revenue and a 3.69% growth in net profit attributable to shareholders, corresponding to earnings per share of 74.65 yuan. At the current stock price, the valuation stands at 19.02 times earnings. Considering the historical valuation range of the baijiu sector and the company's prominent position within the industry, a target valuation of 23 times earnings is applied, resulting in a target price of 1716.95 yuan and a "Strong Buy" recommendation.
Risk factors include a slower-than-expected macroeconomic recovery, weaker-than-anticipated overall demand for baijiu, and significant issues in corporate management. Detailed latest profit forecasts are as follows: Over the past 90 days, a total of 24 institutions have provided ratings for the stock, with 20 recommending Buy, 3 recommending Outperform, and 1 recommending Hold. The average institutional target price over the past 90 days was 1917.13 yuan.
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