贵州茅台Q3：飞天酒销量受直销和生肖酒库存调整抵消

Euan McLeish+81 3 5962 9611euan.mcleish@bernsteinsg.com Hao Wang, CFA+852 2123 2627hao.wang@bernsteinsg.com RatingOutperform Mufei Gao+81 3 6777 6995mufei.gao@bernsteinsg.com Price Target 600519.CH 2,100.00 CNY(2,200.00OLD) Moutai Q3: Fetien strength offset by OLS and Zodiac inventoryrightsizing Moutai reported a weak set of Q3 results with revenues flat YoY despite strong Fetien growth(+7%) which was offset by a 57% decline in iMoutai revenues and a 34% drop for OLS. Thisapparent rightsizing of non-Fetien inventories should be beneficial for distributor marginsgoing into the end of the year, and Moutai also looks to be supporting the channel via the 5xYoY increase in notes receivable which reached c. 12% of Q3 sales. Net profit grew by 0.5%YoY in Q3, c. 10% below BBG consensus and 12% below our est. Total Direct Sales mix pulled back to 40% in Q3, down from 47% a year ago (Exhibit 6), asa result of iMoutai weakness which was driven by declining 1935 and non-standard Fetienskus (Zodiac, and Prestige etc.) whose general market wholesale prices are now lower thanthe listed prices on iMoutai. Excluding iMoutai, the “real” Direct Sales to supermarkets andonline platforms was broadly flat YoY in Q3. OLS revenue was down by 34% YoY in Q3 compared to the 7% decline in Q2, but the growthof Fetien via the distributor channel was sufficient to more than offset this and Moutaidelivered a 20bps Gross Margin expansion and 180bps EBIT Margin expansion in Q3. While we don’t put any stock in advance payments as a predictive metric, the market doestend to react to this, and the 20% YoY decline in Q3 is likely to be taken as a -ve catalyst. Investment Implications We rate Moutai Outperform but have cut ourPT toRMB2,100(2,200 before) aftercutting our FY25/26EPS estimates by 7%/8% to reflect the weak quarter and further OLS/non-standard channel inventory correction. We have rolled forward our valuation base andmaintain our 24x target P/E multiple (model). DETAILS EXHIBIT 11:Distributor team continues growing since early this year BERNSTEIN TICKER TABLE I. REQUIRED DISCLOSURES References to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,Sanford C. Bernstein (Canada) Limited, SanfordC. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited andSanford C. Bernstein Japan KK(サンフォード・C・バーンスタイン株式会社). On April 1, 2024, Société Générale (SG) and AllianceBernstein, L.P. (AB) completed a transaction that created a new joint venturein which their respective cash equities and research businesses operate in a new business combination. Although their respectiveownership percentages in the joint venture differ between North America and the rest of the world, the creation, production andpublication of research is handled collaboratively on a global basis across the two research brands, “Bernstein” and “Autonomous”.Unless specifically noted otherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG andAB and their respective affiliates. VALUATION METHODOLOGY Kweichow Moutai Co Ltd We set a CNY2,100 price target for Moutai using a P/E multiple of 24.0x against our forward NTM+1 EPS estimate of CNY89,which implies an NTM EV/EBITDA multiple of 16.5x based on our forward NTM+1 EBITDA estimate of CNY152b. RISKS Kweichow Moutai Co Ltd Potential downside risks to our Price Target for Moutai: •China macro risk – a shock to the economy results in lower growth of the high income population and negatively impacts UltraPremium Baijiu consumption demand •Material excess Fetien channel inventories accumulate and are released to the market simultaneously causing a material andunpredictable decline in Moutai’s sell in volumes•State Owned Enterprise corporate governance related issues (ie. abuse of cash balance) could destroy minority shareholders'value RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTION EQUITY RATINGS DEFINITIONS Bernstein brand The Bernstein brand rates stocks based on forecasts of relative performance for the next 12 months versus the S&P 500 forstocks listed on the U.S. and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap PriceReturn Index (EDM) for stocks listed on the European exchanges and emerging markets exchanges outside of the Asia Pacificregion, versus the Bloomberg Japan Large and Mid Cap Price Return Index USD (JP) for stocks listed on the Japanese exchanges,and versus the Bloomberg Asia ex-Japan Large and Mid Cap Price Return Index (ASIAX) for stocks listed on the Asian (ex-Japan)exchanges -unless otherwise specified. The Bernstein brand has three categories of ratings: •Outperform: Stock will outpace