茅台：欢乐中国年

RatingOutperform Price Target 2,000.00 CNY 600519.CH Moutai: It's a happy Chinese New Year Moutai demand is looking increasingly strong as we head into the key Chinese New Yearholiday period. Fetien wholesale prices start the week at RMB1,690 (Exhibit 1), up 12% sincethe start of January when Moutai announced fundamental changes to their route to marketfocused on taking control of the Fetien value chain. This strong Fetien demand picture iscorroborated by the surge in i-Moutai App weekly average users from c. 2m to 10-12msince Fetien was released on the platform (Exhibit 2). And users are increasingly active, nowopening the App on average 4.5 times per day compared to only 2.1 on average over the lasttwelve months which indicates that Moutai is releasing significant volumes of Fetien via theApp. We came away from our recent meetings with i-Moutai management with a view thatthe company has made a decisive and highly mix accretive channel pivot (Fetien sales via i-Moutai command a 28% ex-factory price premium), and this latest i-Moutai data increasesour conviction. The demand/supply picture is also improving for high end Fetien skus, with Wholesale pricesof key skus +16-20% from their trough in Dec 2025 (Exhibit 4), and the Zodiac Snake skujust a shade below the key RMB 2,000 threshold. This improvement is helping to reducethe pressure on distributor working capital which was a key factor driving the liquidation ofFetien inventories throughout 2025. We expect the high-end sku inventory correction tobe completed in H1 2026 and, thereafter, we expect Moutai to return to their DD earningsgrowth trajectory. Investment Implications Moutai valuation is compelling with the stock trading broadly in line with the China ConsumerStaples Index on most metrics - NTM P/E: 19.5x, NTM EV/EBITDA: 13.8x, FCF Yield; 4.4%,Div Yield: 3.5% (Exhibit 5) - despite Moutai’s significantly higher margins, ROIC, sustainablegrowth outlook, brand equity and, now, increasingly high Quality commercial strategy. WerateMoutai Outperformwith aRMB2,000 PT(model: 600519.CH). DETAILS EXHIBIT 3:iMoutai users now open the App 4.5 times per day which indicates that the company is making materialFetien volumes available via the channel and that the mix impact is likely to be significant EXHIBIT 4:High-end Fetien sku wholesale pricing is up 16-20% from the trough in December 2025, reducingpressure on distributor working capital High-end Fetien Wholesale Prices Delta: Current vs. the Trough in Dec 2025 EXHIBIT 5:Moutai valuation is compelling, with the stock trading close to the average China Consumer staplescompany on most metrics, despite it’s superior Quality credentials EXHIBIT 6:Moutai’s P/E and EV/EBITDA multiples areclose to 5yr lows BERNSTEIN TICKER TABLE