Kweichow Moutai Co.,Ltd. (600519.SH) held its performance briefing for the fiscal year 2025 and the first quarter of 2026. The company addressed key investor questions regarding its recent performance, revenue recognition rules, channel relationships, and its ongoing market-oriented reforms.
Wang Li, Deputy Party Secretary, Director, and Acting General Manager of Kweichow Moutai, stated that the company has entered a transition period from high-speed growth to high-quality development. Operations will focus on sustainable, high-quality growth driven by market demand, with full commitment to implementing reforms.
The 2025 annual report showed a rare simultaneous decline in both total revenue and net profit, marking the first annual performance drop since the company's listing. In the fourth quarter alone, operating revenue was 40.384 billion yuan, down 19.43% year-on-year, and net profit attributable to shareholders was 17.693 billion yuan, down 30.35%.
In response, Wang Li explained that facing industry-wide adjustments, weak consumer demand, and reduced consumption scenarios, the company respected market principles, prioritized channel resilience over rigid targets, and proactively scaled back operations to maintain market stability, leading to the significant Q4 declines. However, this period also presented a crucial window for reform, prompting the company to initiate a comprehensive "consumer-centric" (C-end focused) market-oriented reform at the start of 2026.
An investor questioned why Q1 2026 profit growth lagged behind revenue growth despite decent overall performance. Wang Li clarified that Q1 was a critical phase for launching the consumer-centric reforms. The company adjusted its product structure, reverting to a "pyramid" model with Feitian Moutai (53% vol, 500ml) as the core product for market release, while other products like premium and aged varieties were primarily allocated through self-operated channels. This product mix adjustment and a market-responsive pricing mechanism led to a decrease in revenue per ton of liquor. Simultaneously, the company increased investment in brand building and marketing to widen its competitive moat and reach more consumers. While this impacted short-term per-ton metrics, it is viewed as healthier for long-term development.
Regarding channel inventory, Wang Li stated that since mid-2025, the company established an evaluation model based on key indicators like channel inventory, inventory-to-sales ratio, and sell-through rate to guide scientific and precise product allocation. Current channel inventory is at a healthy and benign level.
Discussing the ongoing market reforms, Wang Li emphasized this round focuses squarely on the consumer, aiming to build supply-side capabilities that truly match C-end demand. Unlike past reforms centered on channels, this transformation encompasses the entire product system, channel ecosystem, business model, and supply chain organization. Building a resilient, stable, efficient, and synergistic channel ecosystem is a key focus.
When asked if reforms would weaken distributors in favor of self-operated channels, Wang Li firmly stated that Moutai and its various channel partners are not in a zero-sum competitive or substitutive relationship. They are a synergistic community of shared destiny and interests, leveraging their respective strengths for mutual success. Self-operated channels act as market "stabilizers and balancers," while social channels serve as "amplifiers and converters" to reach households. Together, they build an interconnected channel "interchange" system, with the ultimate goal of being consumer-centric and market-driven.
For the i Moutai platform, Q1 2026 revenue surged 267% year-on-year. Wang Li noted that i Moutai is a vital carrier for digital transformation and marketing reform, directly connecting with end consumers. In Q1, it achieved sales revenue of 21.553 billion yuan, with cumulative registered users reaching 93.4496 million, adding 13.9846 million new users in the quarter. The platform will continue to enhance operations across five core areas: products, users, content, customer service, and technology.
Regarding the 2026 marketing direction, Wang Li confirmed the main theme remains the consumer-centric market reform, with progress and results meeting expectations so far.
**On Potential Financial Restatements**
An investor raised concerns following a significant restatement by a peer company, asking if Kweichow Moutai faces similar revenue/profit recognition issues or future restatement risks, and how it ensures credibility.
Yu Siming, Party Committee Member, CFO, and Acting Board Secretary, responded that the company strictly follows accounting standards, recognizing revenue when customers obtain control of goods. For self-operated channels (including i Moutai), revenue is recognized upon customer receipt confirmation; for social distributor channels, upon distributor sign-off.
To support distributors during the industry adjustment, the company's subsidiary, Moutai Finance Company, provided buyer's credit. In 2025, total buyer's credit disbursed was 4.15 billion yuan (2.46% of operating revenue), with 328 million yuan (0.19% of revenue) under a product pledge model. Adhering to the substance-over-form and prudence principles, revenue at the consolidated level is only recognized after distributors repay the loan and complete procedures to obtain full control of the pledged products.
Yu Siming emphasized that the company's financial reports are true, accurate, and complete, and have consistently received unqualified audit opinions.
Contract liabilities, reflecting distributor prepayment willingness, stood at 3.027 billion yuan at the end of Q1, down 62.20% from 8.007 billion yuan at the end of 2025. Yu attributed the sequential decline to two factors: 1) For Moutai酒, optimized channel layout increased direct sales via i Moutai, and no traditional Q1 distributor prepayments were arranged. A new "consignment" model without title transfer for some products also reduced contract liabilities. 2) For series酒, product allocation was based on channel indicators like inventory-to-sales ratio to enhance channel health.
Yu added that as market reforms advance and the multi-dimensional marketing system improves, contract liabilities are no longer the sole core indicator of channel confidence.
**On Future Guidance and Feitian Moutai Pricing**
In late March, Kweichow Moutai raised the sales contract price and self-operated retail price for its core product, Feitian Moutai. When asked about potential further price increases, Wang Li stated the company has established a dynamic adjustment mechanism for self-operated retail prices based on "market conditions and relative stability." After the initial adjustment for the entire Moutai酒 product line, the company will continue to monitor market supply-demand, consumption trends, channel inventory, and terminal sell-through, conducting scientific analysis to build a demand-driven, balanced dynamic pricing mechanism.
Regarding the operational shift from a traditional "self-sale + distribution" model to a multi-dimensional "self-sale + distribution + consignment +寄售" system, Wang Li clarified that both consignment and寄售 models involve no title transfer and are considered direct sales. The consignment model has been piloted, while the寄售 model requires further market assessment.
Notably, the 2026 financial report did not provide specific numerical targets. When asked if this meant an end to future performance guidance, Wang Li explained that past quantitative guidance was primarily based on supply-side certainty. However, during market reforms, market changes introduce uncertainty. The company must follow market规律, not just supply-side decisions. In its transition to high-quality development, operations will be guided by market demand to create greater shareholder value.
On the broader industry adjustment, Wang Li noted the白酒 industry is undergoing profound cyclical and structural changes. Cyclical adjustment involves moving from the "entropy increase" of无序 expansion to systematic "entropy reduction" for a new growth cycle. Structural adjustment is driven by irreversible changes in the demand side in the digital era, to which the industry's multi-tier distribution model and channel-centric operations are not yet fully adapted. Navigating cyclical changes requires resilience, while structural shifts demand innovation to match evolving consumer needs.
Wang Li believes "competition for market share" and the "Matthew Effect" will become more pronounced, presenting both challenges and opportunities for companies that can innovate and achieve a full consumer-centric transformation.
Regarding the upcoming annual shareholders' meeting, Wang Li indicated it is scheduled for mid-to-early June 2026, with details to follow in subsequent announcements.
As of the close on May 11, Kweichow Moutai's stock price was 1361.33 yuan per share, down 0.85%, with a total market capitalization of approximately 1.7048 trillion yuan.
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