Goldman Sachs: Maintains Buy on Moutai, Bullish on its Market-Oriented Reforms and DTC Platform Expansion

Overview

This report is based on notes taken after Goldman Sachs's team attended the Kweichow Moutai annual general meeting (June 11, 2026). The core view of the report is that 2026 marks the substantive start of Moutai's new round of market-oriented reforms. Management clearly stated that the reforms are not limited to the sales end but represent a strategic transformation throughout the entire value chain. Goldman Sachs maintains a 'Buy' rating on Kweichow Moutai with a target price of 1,616 RMB (approximately 26% upside from the current price). The institution is optimistic about the company's ability to navigate cycles by deepening digitalization, expanding DTC (direct-to-consumer) coverage, and optimizing channel structure, given its solid brand moat.

Core views

First, market-oriented reform has become the core pillar of Moutai's 15th Five-Year Plan. Management stated that the company will further transform from a pure 'product supplier' to a 'brand operator', focusing on strengthening direct consumer interaction, deepening digitalization, and responding quickly to market demand. Goldman Sachs believes this reflects management's priority on long-term sustainable demand and channel profitability, rather than simply pursuing short-term shipment volume growth. Second, the user expansion and data accumulation of the DTC platform 'i-Moutai' have yielded significant results, a key highlight of this research. Data shows that as of the end of May 2026, i-Moutai had accumulated 96.2 million registered users (17 million new additions during the year), with monthly active users (MAU) reaching 9.6 million. The platform processed 7.13 million transactions in May (compared to about 3.98 million in Q1), indicating very high activity. Goldman Sachs estimates that Feitian Moutai's sales on i-Moutai alone reached 28.8 billion RMB in May. Additionally, technological upgrades on the platform to combat scalpers and fraud help further improve user quality and platform efficiency. The institution views i-Moutai as the most important tool for Moutai to obtain first-hand consumer data and understand market demand. Third, optimization of the channel structure is reshaping the supply-demand relationship. Management emphasized that channel distributors remain indispensable key participants in the ecosystem, and future growth will increasingly rely on enhanced customer service capabilities. With the direct sales channel share exceeding 50% in Q1 2026, the direct sales channel is gradually playing a 'stabilizer' role to maintain a healthy terminal market price system. Fourth, for the non-core series liquor business, management adopted a more prudent 'supply-demand balance' strategy. The company is committed to avoiding unreasonable inventory build-up through stricter inventory assessment measures to maintain the healthy dynamics of the series liquor. In 2026, the sales targets for both Moutai 1935 and Prince Liquor are set at 10 billion RMB each. Finally, globalization and youth-oriented exploration maintain long-term strategic patience. Overseas expansion is listed as a key growth driver in the 15th Five-Year Plan, and the company will increase investment accordingly. Regarding brand rejuvenation targeting young consumers, management's stance is cautious, suggesting a focus on long-term brand equity accumulation rather than relying on short-term traffic spikes from large-scale collaborations.

Analysis framework

The deductive logic of this report mainly follows the analysis path of 'strategic intent - execution lever - financial verification'. The institution first extracted the core strategic theme of 'market-oriented reform' from management statements at the shareholders' meeting; then, by tracking high-frequency operating data such as i-Moutai's DAU/MAU, GMV, and registered users, it quantitatively assessed the implementation of this strategy at the execution level; finally, combined with channel structure changes (increased direct sales share) and the series liquor supply control strategy, it judged the long-term impact of these measures on maintaining the company's high margins and pricing power, thereby supporting the conclusion to maintain the 'Buy' rating.

Methodology notes

• Industry/Industrial Analysis FrameworkIndustry Chain Upstream-Downstream Transmission

  Industry Chain Upstream-Downstream Transmission

  The report analyzes how Moutai bypasses traditional multi-tiered distributors by increasing the share of direct-to-consumer (DTC) channels, extending its value capture capability upstream while strengthening control over downstream terminal prices.

• Company Fundamentals and Financial FrameworkEarnings Quality Analysis

  Earnings Quality Analysis

  The report notes that management has abandoned aggressive shipment targets in favor of channel health and distributor margins. This behavior of sacrificing short-term revenue growth to ensure long-term pricing power and channel confidence is considered a hallmark of high-quality earnings.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Kweichow Moutai (600519.SS)

  As the leading A-share high-end baijiu company, it benefits from the company's proactive market-oriented reforms, margin improvement from increased DTC channel share, and the current undervaluation recovery opportunity.

  Strengths

  Possesses a strong brand moat and pricing power; digital platforms like i-Moutai successfully reach a massive direct consumer base; ample cash flow, increased dividends and share buybacks.

  Weaknesses

  Potential regulatory risks from consumption tax policy changes; capacity expansion constrained by geographical environment.

  Comparison

  Compared to other baijiu peers, Moutai has an advantage in channel control and counter-cyclical resilience.

  Risks

  Weak demand due to worse-than-expected macro recovery; valuation compression from significant fluctuations in US Treasury yields.

Key data

• i-Moutai cumulative registered users96.2 million peopleAs of end of May 2026, 16.7 million new additions during the year
• i-Moutai monthly active users (MAU)9.6 million peopleData for May 2026
• i-Moutai single-month transaction volume7.13 million transactionsMay 2026, significant volume increase compared to Q1
• i-Moutai Feitian Moutai sales28.8 billion RMBGoldman Sachs estimate for May 2026
• Direct sales channel shareOver 50%End of Q1 2026
• 12-month target price1,616 yuanBased on 23.4 times 2027E P/E
• Implied upside from current share price26.3%Based on current price of 1,279 yuan

Impact & implications

The report believes that Moutai's current strategic transformation implies a shift in its growth model from extensive growth reliant on channel inventory loading to refined growth driven by digital capabilities and brand premium. This shift helps reduce the impact of macroeconomic fluctuations on baijiu wholesale prices and enhances earnings certainty. Meanwhile, the current P/E multiple of 19x has significantly de-rated from historical highs, and combined with a dividend yield of about 4% and ongoing share buyback plans, it offers investors an attractive risk-reward profile.

Risks

• Potential policy regulatory changes such as consumption tax rate hikes
• Macroeconomic recovery slower than expected
• Capacity expansion constraints
• US interest rate volatility (Moutai's P/E is negatively correlated with the US 10-year Treasury yield)
• Environmental pollution risk

What to watch

• Subsequent user retention rate and repurchase rate data for the i-Moutai platform
• Changes in the sales share of non-standard products (e.g., series liquor) on i-Moutai
• Latest management guidance on shipment cadence and channel inventory levels in H2
• Specific investment implementations for overseas market expansion