20230417-招银国际-贵州茅台-600519.SH-1Q_came_in_slightly_higher_than_we_expected_4页_950kb

Kweichow Moutai Equity Research Summary

Company Update

Kweichow Moutai (600519 CH) is a leading Chinese spirits company, focusing on Moutai spirit and related products. The report highlights its performance and valuation in the context of China's reopening post-pandemic.

Key Financial Data (YE Dec 2022)

• Financial metrics from FY20A to FY24E show strong revenue growth: Revenue at 97,993 RMB mn in FY20A to 172,710 RMB mn in FY24E, with consistent YoY increases.
• Net income/projected increases from 46,697 RMB mn to 86,626 RMB mn, driven by premiumization and expanded offerings.
• Key ratios: Net margin rising from 48% to 50.2%, P/E decreasing from 34x to below 250x, P/B stable around 95-250.

Recent Financial Performance

• 1Q 2023 data indicates revenue and net profit grew 18% and 19% y-o-y respectively, exceeding analyst expectations driven by incremental iMoutai sales and premiumization efforts.
• Following concerns from events like Wine Fair, wholesale pricing for sealed Feitian Moutai recovered to RMB 2,950 per bottle; further recovery expected in subsequent periods as inventories ease.

Analyst Recommendation and Valuation

• Recommendation: BUY with 423% upside potential from current price RMB 1,713 to target price RMB 2,440.
• Valuation Basis: Target price derived from 410x end-23 EP/E, reflecting optimism over Moutai's role in China's reopening, compared to sector averages; higher P/E than some peers due to strong earnings support.

Key Strengths

• Strong benefits from China's reopening, positioned as a core beneficiary in the beverage sector with high certainty in earnings.
• Pricing recovery aligned with festive periods, potentially boosting net margins further.

Analyst Certification and Disclosure

• Analyst certifies views reflect personal opinions and no compensation ties to report; no recent trading in covered stocks; BUY rating issued.
• Disclaimers: Investment risks included; data accuracy not guaranteed; reliance on report incurs liability at user's risk; conflicts possible due to business relationships.