Moutai Boosts Mid-Autumn Sales with Major Good News, Boosting Market Confidence

The Mid-Autumn Festival liquor market in 2024 has attracted widespread attention from all sectors.

Despite the overall market's lukewarm performance, Kweichow Moutai, as a representative of sauce-flavored liquor and high-end Chinese liquor, still demonstrates a strong demand characteristic in its price range.

Terminal sales are good, demand surges during the festival, inventory turnover has significantly accelerated, and in some areas, the supply of Feitian Moutai is even unable to meet demand, with overall performance far exceeding market expectations.

On September 20th, Kweichow Moutai announced that it would use its own funds to repurchase shares for cancellation with an investment of 3 billion to 6 billion yuan.

This is the first time the company has repurchased shares for cancellation since its listing 23 years ago.

It is also another significant positive move in the capital market since the announcement in August to increase dividend distribution, which is bound to further boost investor and market confidence.

More importantly, whether it is liquor distributors, consumers, investors, or financial experts, they all have an unwavering high confidence in Kweichow Moutai.

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This confidence, more precious than gold, indicates that Moutai's value has not changed, its development has not stagnated, and its future remains promising.

Distributors' confidence in Moutai's consumer demand primarily comes from the distributors themselves.

Several distributors have stated that the demand and sales of Kweichow Moutai products are still quite strong.

"This year's demand for high-end liquor for gifting and business purposes may have slightly decreased compared to last year, but overall consumption is still good," said a liquor merchant who sells a variety of famous liquors.

This year, every link in the sales process of Moutai liquor has become more rational, maintaining rapid turnover in daily sales.

This has not only increased turnover rates but also protected consumer interests, achieving a "win-win-win" situation for Kweichow Moutai, distributors, and consumers.

"Although many customers have made advance reservations, we will maintain balanced sales because selling out in advance would lead to a supply shortage and cause market price fluctuations, which would also be harmful to customers," said a liquor merchant in Beijing.

A considerable number of distributors have seen an increase in transaction volumes.

A person in charge of a trading company in Xi'an, Shaanxi, said that the overall consumption of Moutai liquor, including high-end products such as 15-year, 30-year, and 50-year vintage liquors, has continued to be in demand and sales are good, and Feitian Moutai liquor is in short supply.

Another liquor merchant in Shandong, who has been in the business for many years, said, "Our transaction volume has increased every month this year compared to the same period last year.

It may be because our Moutai series of liquors has a complete range and we have been in business for a long time, and old customers will even actively introduce new customers."

Distributors are full of confidence and expectations for Kweichow Moutai.

A liquor wholesaler in Zhengzhou, Henan, mentioned, "I believe that the future market sales of Moutai will be even better.

From the product structure to the channel structure, I am full of confidence in Moutai!"

This liquor merchant has been in the business of famous liquors for nearly 20 years, has experienced several cycles of the liquor industry, and ultimately chose to focus his business on Moutai liquor and sauce-flavored series liquors.

Many investors are optimistic about the future performance of Moutai and are confident that after this round of adjustments, it will gradually reach a new state of equilibrium, and its medium and long-term investment value will gradually be reflected, forming new support for the sector's valuation.

Numerous domestic and foreign funds and small and medium investors have chosen to increase their holdings, expressing their confidence and support for Kweichow Moutai with real money.

Yifangda, a leading domestic public fund company, increased its holdings of Kweichow Moutai by 136,800 shares in the second quarter, making it the fourth-largest heavy stock, and the fund manager Guo Jie said that he holds a heavy position in consumer stocks because of their mass appeal, repeat consumption, and brand attributes, which have a more stable and sustainable business model and strong resilience in the face of economic fluctuations.

The pessimistic view that performance will continue to decline and there is no future is clearly inconsistent with the industry's own attributes.

"We are full of confidence in the future prospects of such stocks, and we will hold them firmly when the market is pessimistically priced, expecting to achieve a stable return," said Guo Jie.

Foreign capital is also optimistic about Kweichow Moutai.

The American asset management leader Capital Group's flagship fund "European Pacific Growth Fund" significantly increased its holdings in the second quarter, from 4.9098 million shares at the end of the first quarter to 5.2322 million shares.

Another fund under Capital Group, "New World Fund," increased its holdings by as much as 49.60% in the second quarter and stated in its research report that its portfolio managers tend to choose "companies with strong cash flow and market dominance" in the Chinese market.

Ordinary investors and well-known financial professionals are also not short of strong bullish views on Kweichow Moutai, which has sparked widespread discussion on social media.

On the afternoon of September 18th, the well-known writer Zijin Chen showed his replenishment and added two more positions, totaling about 636,000 yuan.

Another senior entrepreneur and investor who has held Moutai for a long time, Duan Yongping, also "strongly supported" Moutai on social media recently, saying that the price of Moutai has been changing, but its value has always been there, "Looking back 20 years later, Moutai should be much better than gold."

Kweichow Moutai's positive moves in the capital market have further boosted investor and market confidence.

On September 20th, the company announced that it would use its own funds of 3 billion to 6 billion yuan to repurchase and cancel shares, which is the first time Kweichow Moutai has implemented a share repurchase and cancellation since its listing 23 years ago.

The repurchase of shares by a listed company itself is a huge support for the stock price, and unlike most repurchases for equity incentives or employee stock ownership, the direct cancellation of repurchased shares to reduce the company's share capital not only supports the stock price but also improves the company's performance level while maintaining the interests of a broad base of investors, which is a real benefit and will significantly enhance investor confidence.

Confidence comes not only from the outside but also from within.

Kweichow Moutai is also full of confidence in itself.

The management of Moutai pointed out that the basic attributes of Moutai liquor have not changed, and the basic demand has not changed.

Over the past few decades, the liquor industry has gone through several rounds of adjustments, and every time Moutai has smoothly passed through the cycle with strong determination and strength, achieving better development.

Kweichow Moutai is confident, strong, and capable of passing through this cycle.

With its strong brand value and the uniqueness of its excellent quality, it has a huge incomparable advantage in cash flow, distribution system, and user stickiness, which is the confidence for Kweichow Moutai to pass through the cycle.

In the era of "rational consumption + rational price," the operation of liquor companies is bound to further differentiate.

For leading companies like Kweichow Moutai, which have strong brand power and a rich product line that can cover multiple price ranges, the future development space will only be broader.

In terms of the macroeconomic environment, with the Federal Reserve's significant interest rate cut on September 18th, the global interest rate cut cycle has officially begun.

Some experts have recently stated that after the Federal Reserve's interest rate cut, at least 40 to 50 billion US dollars from overseas can flow back to the Chinese market, which brings more macro policy space for China and will have a significant repair effect on the real economy and consumer confidence.

China is expected to usher in a new asset cycle in the future.

Looking forward, with the improvement of the macro consumer environment, the liquor industry will speed up its pace to get out of this round of adjustment cycle.

As a leading company, Kweichow Moutai's sales and revenue growth are bound to be further improved, and it will repay the confidence of distributors, investors, and other stakeholders with its own stability, health, and sustainable development.