How did direct sales growth affect results?

  • In the third quarter of 2026, Kweichow Moutai recorded revenue of 40.27 billion yuan, up 3.1% year on year, and net profit of 19.95 billion yuan, up 3.8%. Revenue for the first three quarters was 130.97 billion yuan, up 2.0% year on year, while net profit was 64.47 billion yuan, down 0.3%. Overall results were broadly in line with Nomura Orient’s previous expectations.
  • Third-quarter direct sales revenue was 21.81 billion yuan, up 40.3% year on year, while revenue from wholesale agents was 18.42 billion yuan, down 21.6%. Direct sales growth coincided with a contraction in wholesale, so total revenue grew much more slowly than direct sales.

Can an improved channel mix support long-term growth?

  • Revenue from the iMoutai platform was 58.56 billion yuan in the first three quarters, up 361.4% year on year. It accounted for 44.7% of revenue from principal operations, an increase of 34.9 percentage points from a year earlier and slightly above 44.4% in the first half.
  • Nomura Orient believes a higher proportion of direct sales will help improve the channel mix in the short term, but the company’s long-term growth still depends on a recovery in end-market demand. The bank cites a weak recovery in high-end consumption and channel adjustments as the main risks.

What changed in the assessment of margins and valuation?

  • The third-quarter gross margin was 89.6%, down 1.6 percentage points year on year, continuing the first-half trend. The net margin for the first three quarters was 49.2%, down 1.1 percentage points year on year and slightly above 49.1% in the first half.
  • Nomura Orient maintained its revenue and net profit forecasts for 2026–2028, raised its target price from 1607.82 yuan to 1741.60 yuan, and maintained its buy rating. The bank shifted its valuation base from 2026 to 2027 and applied a target price-to-earnings ratio of 25 times, above its previous 24 times and the company’s historical average of 23 times over the past three years.
  • The valuation reflects the bank’s view that market-oriented reforms and an improved channel mix are expected to strengthen operating resilience over the medium to long term. The bank forecasts earnings per share of 69.66 yuan for 2027.