China Postal Securities: Maintain a "Buy" rating on Kweichow Moutai, price increases are expected to drive improvements in the second half of the year.

According to a research report by Zhongyou Securities, the revenue of Kweichow Moutai in the off-season is under short-term pressure, but price increases are expected to drive improvements in the second half of the year. In the first half of the year, the company achieved operating revenue/net profit attributable to the parent company/net profit excluding non-recurring items of 90.703 billion/44.517 billion/44.464 billion yuan, with year-on-year changes of +1.47%/-1.95%/-2.04%. The companys Flying Fairy sales are stable, and the steady increase in off-season wholesale prices supports the foundation for price hikes. Under market-oriented reforms, prices can largely reflect the resilience of demand. As the second half of the year enters a low base on a quarterly basis, combined with price increases for products like Flying Fairy, it is expected that the companys revenue and profit growth rates will improve sequentially in the second half. It is projected that from 2026 to 2028, the companys revenue will reach 177.638 billion/185.591 billion/194.543 billion yuan, with year-on-year growth of 3.25%/4.48%/4.82%, and net profit attributable to the parent company will reach 83.171 billion/86.219 billion/91.285 billion yuan, with year-on-year growth of 1.03%/3.66%/5.88%. This corresponds to a PE ratio of 19/19/18 times based on the current stock price, maintaining a "buy" rating. In 2025, the companys dividend and share buyback will account for 86% of profits, and if we calculate based on an 86% dividend rate for 2026, the current dividend yield will be 4.4%.