Kweichow Moutai Earned CNY 14.6 Bn in Q3 2022, with Direct Sales Increasing Rapidly

Kweichow Moutai Co., Ltd (Chinese: 贵州茅台, 600519:SH) released its Q3 report on 16 October. In the first three quarters of 2022, the company achieved revenue of CNY 87.16 billion ( USD 12.114 billion), increasing by 16.77% year-on-year.  And it earned a net profit of CNY 44.4 billion, rising 19.14% compared to the same period of the previous year. In Q3, the company reached a net profit of around CNY 14.6 billion, an increase of 15.81% year-on-year. During the reporting period, revenues from the direct sales channel of Kweichow Moutai increased significantly to over CNY 30 billion.

Kweichow Moutai, founded in 1999, is a famous high-quality liquor producer in China. The company's main product is the Kweichow Moutai spirits series, which is one of the "Three World Famous Spirits" (the other two are French Cognac and English Scotch Whisky). In addition to liquor, the company also produces and sells beverages, food and packaging materials and is involved in the financial, tourism and real estate industries.

In recent years, Maotai has continued to change its sales approach, especially by focusing more on self-operated channels. According to statistics, the company's revenue from direct sales channels reached CNY 31.882 billion in the first three quarters of 2022, accounting for approximately 36%, an increase of double over the same period of the previous year, while the revenue of wholesale channels decreased slightly year-on-year to CNY 55.059 billion. In addition, Moutai distributors in China fell by 5, with no new distributors added in Q3 2022. It means that the effectiveness of Kweichow Moutai's sales channel change is continuously showing.

In addition, Kweichow Moutai's two-wheeled strategy of Moutai and series liquor is steadily advancing. For the first 3 quarters of 2022, series liquor sales revenue was CNY 12.54 billion, an increase of about 30% year on year.

From an industry-wide perspective, a number of Chinese listed liquor companies generally reported an increase in earnings.

In the first three quarters of 2022, Luzhou Laojiao (Chinese: 泸州老窖, 000568:SZ) is expected to achieve a profit of CNY 8.052 billion, up 28% year-on-year; Shanxi Xinghuacun Fen Wine Factory (Chinese: 山西汾酒, 600809:SH) is expected to achieve a net profit of CNY 7 billion, up 42% year-on-year; and Gujing Distillery (Chinese: 古井贡酒, 000596:SZ) is expected to reach a net profit of CNY 2.623 billion, up 30% year-on-year.

In addition to the companies mentioned above, Kweichow Moutai's competitors include Yanghe (Chinese: 洋河, 002304:SZ), Wuliangye (Chinese: 五粮液, 000858:SZ), Xifeng (Chinese: 西凤酒) and Jiannanchun (Chinese: 剑南春).