Kweichow Moutai's Distributors Can Absorb Higher Prices -- Market Talk

Dow Jones2023-11-01

0645 GMT - Kweichow Moutai's decision to raise ex-factory prices of some products, at a time when wholesale prices of its key product Feitian have been stagnant, is different from past increases that came following a surge in retail prices, Jefferies analysts write in a research note. But "we believe Moutai's distributors have sufficient margins to cushion the price hike," and thus the move should boost Moutai's profit and benefit shareholders, the analysts write. Key now, they add, is to watch whether distributors will build inventory, and whether other baijiu brands will follow with higher prices. Jefferies has a buy rating with a CNY2,175.00 target price. Shares are up 6.4% at CNY1,792.03. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

(END) Dow Jones Newswires

November 01, 2023 02:45 ET (06:45 GMT)

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