Worthless Moutai liquor, valuable Moutai stocks

Author | Fan Liang

Editor | Zhang Fan

Flying Fairy Maotai Ends the Premium Era

Recently, there have been continuous negative news about Maotai.

On the one hand, the market price of the 53-degree Flying Fairy Maotai, a core indicator of Maotai's stock price, has been continuously declining. As the Double Eleven shopping festival approaches, high-end liquor, which is a powerful tool for e-commerce platforms to boost GMV, has seen its price drop further under subsidies on some platforms. The retail price of the 53-degree Flying Fairy Maotai, which used to be sold at a premium, has dropped below 1,499 yuan per bottle on some e-commerce platforms, ending the premium era of the 53-degree Flying Fairy Maotai.

Picture: The selling price of 53-degree Flying Fairy Maotai on e-commerce platforms. Source: Pinduoduo, compiled by 36Kr

On the other hand, its third-quarter report released not long ago shows that its year-on-year revenue growth rate for the single quarter was only 0.35%, the lowest level since 2016.

However, at the same time, Maotai's stock price has not shown obvious fluctuations, and there are still "big shots" in the capital market choosing to continue to increase their holdings of Maotai. In early October, when Maotai's stock price dropped to around 1,400 yuan per share, Duan Yongping announced on a social platform that he had bought Maotai shares. The third-quarter report disclosed by fund manager Zhang Kun shows that E Fund Blue Chip Selection, which he manages, also chose to continue to increase its position in Maotai.

So, against the background of Maotai's significant slowdown in performance and continuous pressure on the retail market price, why are there still funds willing to believe in Maotai?

Can Maotai Stabilize Its Stock Price Without Relying on the Liquor Price?

If Maotai mainly relied on operational means to maintain the stable growth of its market value in the past, then it has gradually begun to use market value management means such as capital tools to boost its stock price.

On November 5th, Kweichow Moutai simultaneously released two important announcements: the mid-year dividend for 2025 and the share repurchase. The company plans to distribute a total cash dividend of approximately 30 billion yuan and use 1.5 billion to 3 billion yuan to repurchase shares. This series of "dividend + repurchase" combination punches were released just when the company's third-quarter report was released and the retail price of Moutai liquor was falling. Therefore, the market generally interprets Maotai's move as a key step to stabilize market expectations and boost the confidence of the capital market.

In the past, under the market pattern where the "Flying Fairy Maotai" was in short supply, the company easily maintained steady growth in performance by adjusting production capacity and ex-factory prices. It was positioned as a "blue-chip growth stock" in the capital market. Under the logic of certain growth in performance - the stock price rising accordingly, active market value management seemed unnecessary.

However, with the transformation of the supply-demand relationship in the liquor industry in recent years, the traditional path of simply relying on supply-side regulation to drive performance and stabilize market value is facing huge challenges. This is an industry-wide problem. As the data of the Wind Liquor Index shows, the year-on-year revenue of the liquor index in the first three quarters of 2025 declined by 5.83%, falling into the negative growth range for the first time in the past decade. This has prompted Kweichow Moutai to turn to more active and market-oriented capital tools for market value management.

As early as 2024, Kweichow Moutai released the "2024 - 2026 Annual Cash Dividend Return Plan", clearly maintaining the rhythm of "annual + mid-year" dividends twice a year, and the total cumulative cash dividends will not be less than 75% of the annual net profit attributable to the parent company. On November 9th of the same year, Moutai launched the mid-year dividend mode for the first time, and the total cash dividend distributed at that time was also approximately 30 billion yuan.

2025 is the "first year" of Kweichow Moutai's market value management. On March 19th, the company's board of directors passed the "Company Market Value Management Measures", and the term "market value management" officially entered the official announcement for the first time. The latest announcement on November 5th clearly proposed for the first time to "promote the normalization of market value management and create a new pattern of high-level shareholder returns". To achieve this goal, the company proposed three core measures: normalized cash dividends, share repurchases, and major shareholder share increases, and all measures are being continuously implemented.

In terms of the specific implementation intensity, Kweichow Moutai's shareholder return plan can be described as "generous":

In terms of cash dividends: The company's annual dividend in 2024 implemented in June was approximately 34.7 billion yuan. Adding the latest announced mid-year dividend of 30 billion yuan, the total cash dividends promised in 2025 alone will reach 64.7 billion yuan.

In terms of share repurchases: As of now, the company has cumulatively invested 6 billion yuan in share repurchases in 2025.

In terms of major shareholder share increases: Moutai Group plans to increase its holdings by 3 billion to 3.3 billion yuan within six months starting from September, and 100 million yuan has been implemented so far.

If these three measures are combined, the total amount of funds that Kweichow Moutai has clearly invested or plans to invest in dividends, repurchases, and share increases is at least 70.8 billion yuan. This amount accounts for approximately 82% of the company's net profit attributable to the parent company in 2024.

What's more noteworthy is that the major shareholder's share increase this time creatively adopted the share increase loan model. Considering that the interest rate of such loans is usually only around 2%, Moutai's dividend income is completely sufficient to cover its interest expenses, which makes the major shareholder's share increase behavior more sustainable. The deeper meaning of this move is to send a strong confidence signal to the market and provide an invisible endorsement for the stability of the company's stock price.

Are Capital Means Really Effective?

Market value management has only been frequently mentioned in the A-share market in recent years, but it has been a common practice in the U.S. stock market.

Take Starbucks as an example. In FY2015, FY2023, and FY2025, its net profit attributable to the parent company after deducting non-recurring gains and losses was 2.425 billion US dollars, 4.146 billion US dollars, and 2.748 billion US dollars respectively. From 2015 to 2023, Starbucks' stock price increased by 177% in total, and from 2015 to the present, Starbucks' stock price has increased by 158% in total.

It is not difficult to find that the increase in Starbucks' stock price far exceeds the increase in its profit. One of the important reasons is the use of market value management means.

From the perspective of cash flow, from FY2015 to FY2025, Starbucks generated a cumulative net cash flow from operating activities of 58.32 billion US dollars, paid a cumulative dividend of 21.154 billion US dollars, and repurchased shares worth 30.793 billion US dollars in total. The total amount of repurchase and dividend funds was 51.947 billion US dollars, which means that Starbucks almost returned all the "earned cash" to the capital market through dividends and repurchases. Especially in the fiscal year 2019, Starbucks' large-scale dividends and repurchases emptied the company's retained earnings, even causing the retained earnings to turn negative.

On the other hand, Starbucks' cumulative capital expenditure during this period reached 20.257 billion US dollars. So, where did the money for capital expenditure come from? The answer is borrowing. From FY2015 to FY2025, Starbucks' cumulative net debt increased by 14.217 billion US dollars, and its asset-liability ratio soared from 53.24% in 2015 to 125.26% in the fiscal year 2025.

Picture: Starbucks' asset-liability ratio data. Source: Wind, compiled by 36Kr

The significance of this operation is that cash dividends passively increase the company's ROE (return on equity) level by reducing shareholders' equity (that is, net assets), and stock repurchases increase/stabilize the company's EPS (earnings per share) level by reducing the number of shares. For example, the company's Non-GAAP EPS increased from 1.58 US dollars per share in FY2015 to 2.13 US dollars per share in FY2025.

Both operations have played a role in improving shareholder returns through capital tools rather than operational means.

Apple actually adopted similar means. It spends a large amount of money on stock repurchases every year. After the fiscal year 2018, the funds used by the company for repurchases and dividends are basically equivalent to the net cash flow from operating activities. At the same time, Apple's asset-liability ratio also increased from 58.91% in the fiscal year 2015 to 79.48% in the fiscal year 2025.

From FY2015 to FY2025, Apple's net profit increased from 45.687 billion US dollars to 112.01 billion US dollars, with a cumulative increase of 145.17%. However, the EPS increased from about 9 US dollars per share to 29 US dollars per share (restoring the operation of splitting 1 share into 4 shares in 2020), with an increase of about 222%. The increase in EPS is much higher than the increase in profit, which is the result of using capital tools to improve shareholder returns.

Picture: Apple's asset-liability ratio and price-earnings ratio data. Source: Wind, compiled by 36Kr

Maotai Has Sufficient Room for Manoeuvre

Finally, looking back at Maotai, the net cash flow from operating activities of Maotai in 2024 was approximately 92.454 billion yuan, which is basically close to the company's net profit. It is estimated that the net cash flow from operating activities in 2025 will also be around 90 billion yuan.

In the aforementioned calculation of Maotai's dividends and repurchases, the total amount of funds that it has clearly invested or plans to invest in dividends, repurchases, and share increases is at least 70.8 billion yuan, accounting for approximately 76% of the net cash flow from operating activities in 2024. Although this data is already at a high level, there is still room for further improvement.

This is mainly due to two reasons. Firstly, Maotai does not have a huge capital demand. From the perspective of capital expenditure, the lowest annual capital expenditure of Maotai in the past 10 years was 1 billion yuan, and the highest was 5.3 billion yuan. The company does not have a demand for large-scale capital expenditure. Secondly, the company still has a huge amount of retained earnings on its books. As of the third quarter of 2025, the undistributed profit on Maotai's books was as high as 210.875 billion yuan.

Picture: Maotai's asset-liability ratio and undistributed profit data. Source: Wind, compiled by 36Kr

With low capital demand and huge retained earnings, the asset-liability ratio in the third quarter of 2025 was only 12.81%. The only interest-bearing debt of the company is the funds absorbed by the financial subsidiary of Kweichow Moutai from various related parties such as the controlling shareholder Moutai Group in a similar way to a bank. This fund is not used by Kweichow Moutai itself, but is used to provide loan services to related parties. The financial report data shows that as of the third quarter of 2025, the amount of deposits and interbank placements (similar to deposit absorption) by Kweichow Moutai was approximately 14.5 billion yuan, and the amount of funds lent out (similar to lending) was 135.4 billion yuan.

The extremely low debt ratio means that Maotai has sufficient financial leverage space to further improve the ROE level. In 2024, Maotai's ROE was 38.43%. After being split by DuPont analysis, its net profit margin attributable to the parent company was 49.52%, the asset turnover was 0.61, and the equity multiplier (total assets/net assets) was only 1.27, close to the lowest level of an equity multiplier of 1.

Therefore, for Maotai, appropriately increasing financial leverage for stock repurchases can not only increase EPS but also increase the equity multiplier, thereby further improving the ROE level.

Overall, compared with companies such as Starbucks and Apple, Maotai not only has huge potential for dividends and repurchases but also has sufficient space to improve its capital structure, increase financial leverage, and further improve ROE. Even if the liquor market continues to be in a downturn in the future, Maotai still has the ability to maintain the stability of shareholder returns through capital tools. For long-term investors such as Duan Yongping and Zhang Kun, whether the company can maintain long-term and stable shareholder returns is the key to whether they can continue to hold the stock. Maotai's potential market value management ability may also be one of the reasons for their choice to continue to increase their positions.

Of course, the core prerequisite for all these operations is that the enterprise itself must have a strong and stable operating cash flow. On this basis, the significance of capital tools is not to make the market ignore performance, but to prompt the market's evaluation criteria to shift from a single "profit growth" to a more comprehensive "total shareholder return". Even if the performance growth rate slows down periodically, investors' confidence can still be effectively supported.

*Disclaimer:

The content of this article only represents the author's views.

The market is risky, and investment should be cautious. In any case, the information in this article or the opinions expressed do not