Moutai Will Improve Profitability From Structural Sales Channel Reform; Raising Our FVE to CNY 750
We are increasing our fair value estimate for wide-moat Kweichow Moutai to CNY 750 per share from CNY 670, as we increase our earnings forecasts to reflect the positive impact from the company’s structural sales channel reform. We now project Kweichow Moutai’s revenue and net profits to grow at CAGRs of 14.7% and 13.9%, respectively, through 2022, with operating margin averaging 60.5%. Following a strong rally year to date, we view the shares as fairly valued at current levels.Moutai is a sauc...
Kweichow Moutai is engaged in the manufacture and sale of "Guizhou Moutai" series distilled spirits; manufacture and sale of beverages, food and packaging materials; development of anti-counterfeiting technologies; and research and development of relevant IT products. Through its subsidiaries, Co. is also engaged in the wholesale of agricultural vice-local products, building materials, decoration materials, metal materials, machineries, electronic products, telecommunication products, hardware, rubber products, general merchandises and furniture. Co.'s products include millesimes liquor, gift liquor, common liquor and other liquor series.
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