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as the wholesale price of liquor continued to weaken during the mid-autumn festival, liquor stocks fell collectively on september 18, with kweichow moutai falling below 1,300 yuan per share, nearly halving its share price high in early 2021. that afternoon, well-known writer zijin chen once again increased his holdings in moutai, and duan yongping and other investment tycoons have also "strongly supported" moutai recently. however, judging from the trend of public funds, moutai is still being reduced, and many well-known fund managers continued to reduce their holdings in the second quarter.

the stock price hit a new low

on september 18, liquor stocks fell collectively, with wuliangye, jiugui liquor, and shede wine generally falling. kweichow moutai fell 2.85% to close at 1,266.9 yuan per share, falling below 1,300 yuan per share, setting a new historical low since october 2022. the latest market value fell below 1.6 trillion yuan, and the price-earnings ratio has fallen below 20 times. from the perspective of funds, moutai ranked first among the top 20 stocks with net selling by the main force today, with a net outflow of 884 million yuan from the main force, and a cumulative outflow of 2.349 billion yuan from the main force in the past three days.

since may this year, moutai's stock price has continued to fall, with a drop of more than 20%. in the long run, moutai's decline since august 2023 has exceeded 30%, which is almost halved compared with its high point at the beginning of 2021.

the mid-autumn festival and national day are approaching, but the peak season for liquor consumption has not arrived. during the mid-autumn festival, moutai was once unpopular, and the wholesale price of feitian moutai continued to fall. as for the reasons for the adjustment of moutai's stock price, the strategy team of china asset management believes that it may be due to the weak sales data during the mid-autumn festival and national day, coupled with the adverse impact of weak macroeconomic demand, and the pessimistic market expectations continued to revise the sector's earnings.

generally speaking, the mid-autumn festival is one of the two key observation points for whether liquor companies can achieve their annual sales targets. recently, the channel is in the stocking and sales period for the mid-autumn festival and national day, but according to market feedback, the wholesale and retail prices of moutai feitian have both fallen in the past two weeks. the market is worried that poor sales and inventory digestion will affect the full-year performance expectations.

however, after this round of adjustments, the industry's short-term pressure may have been released, and listed wine companies are taking active actions to ensure that their annual growth targets are met. the mid- and long-term investment value will gradually be reflected after expectations improve. huachuang securities' dong guangyang team believes that the core reason for the decline in sales this time is the weakening of external demand and the decline in consumption frequency and grade. in addition, factors such as stricter supervision of some industries and typhoon weather in east china also have a certain impact.

differences in adding and reducing positions

as moutai's stock price hit a new low, moutai's supporters are still firmly bullish. on the afternoon of the 18th, the well-known writer zijin chen posted his own stock replenishment, adding two positions of kweichow moutai, totaling about 636,000 yuan. he said that the current moutai position has a floating loss of about 20%.

however, zijin chen said that he was very restrained in adding positions, as there is currently great uncertainty. he believes that the factors that reverse the trend are either the rapid decline of the market, leaving room for speculation, or more and more major shareholders increasing their holdings. apart from that, he is not worried about missing out. duan yongping, another long-term moutai shareholder, also recently "strongly supported" moutai on social media: "looking back 20 years later, moutai should be much better than gold."

however, judging from the trend of public funds, the reduction of moutai's holdings is ongoing. wind data shows that as of the end of the first half of 2024, kweichow moutai has slipped to the third place in the market value of public funds' holdings, behind petrochina and industrial and commercial bank of china, with a reduction of 8.01 million shares compared with the first quarter, and a decrease of 239.1 billion yuan in holdings. compared with the high point in 2021, public funds reduced their holdings by 31.04 million shares, and the market value of their holdings decreased by 628.1 billion yuan, a decrease of about 31%.

apart from the passive increase in holdings of index funds such as csi a50 etf and sse 300 etf, only a few public funds increased their holdings of kweichow moutai in the second quarter, while consumer-themed funds managed by several well-known fund managers reduced their holdings.

for example, the e fund high quality strict selection three-year holding managed by xiao nan, a well-known fund manager of e fund, reduced its holdings of moutai by 305,600 shares, and the market value of its holdings decreased by 570 million yuan; the fuwu tianhui select growth mixed (lof) managed by zhu shaoxing, a well-known fund manager of fuwu fund, reduced its holdings by 269,900 shares; the huatai value select mixed fund managed by the well-known fund manager lao jie'nan reduced its holdings by 188,300 shares; the china europe new blue chip and china europe new trends managed by zhou weiwen, and the yinhua xinyi and yinhua xinxiang one-year holding managed by li xiaoxing and zhang ping, and many other funds all reduced their holdings by more than 90,000 shares.

pricing power is under attack

as for the reason for reducing holdings of high-end liquor, jiao wei, a well-known fund manager of yinhua fund, explained in the semi-annual report that the consumption upgrade industry represented by high-end liquor has become a representative of the business model with high roe, high gross profit margin and high moat in the past few years. however, we are currently at the threshold of a new round of economic transformation, and these successful business models are facing both external and internal challenges.

to a certain extent, the higher the gross profit margin and pricing power in the past, the more vulnerable it is to the impact and questioning under the new round of economic model. in this context, the adjustment of valuation may precede the profit itself.

however, jiao wei disagrees with the popular saying that "high-end liquor will enter a historical garbage time for investment". he said that consumer moat companies represented by high-end liquor still have huge advantages in cash flow and user stickiness, and he will wait and see, waiting for these companies to reach an inflection point in inventory and mature into dividends to give back to investors.

wu xingwu, manager of gf rotational allocation mixed fund, said that for high-end liquor brands, brand has always been the most valued competitive advantage, but the original logical chain has been destroyed. this is clearly reflected in the decline in the wholesale price of moutai. it is necessary to re-evaluate the friendliness of the macro environment to brand consumption.

author: zhang shulin, ge yao, source:, original title: "is moutai still popular? zijin's chen increases his holdings, duan yongping firmly "defends" it"