Kweichow Moutai Co.,Ltd. (stock code: 600519) released its 2026 half-year report on the evening of August 14, showing a slight revenue increase but a modest net profit decline. During the reporting period, the company achieved operating revenue of 90.703 billion yuan, up 1.47% year-on-year, while net profit attributable to shareholders reached 44.517 billion yuan, down 1.95% year-on-year. No profit distribution plan was proposed for the period.

Based on these figures, in the second quarter alone, the company posted revenue of 37.575 billion yuan, a 5.23% year-on-year drop and a 31.31% sequential decline. Net profit attributable to shareholders was 17.274 billion yuan, a 6.90% year-on-year decrease and a 36.59% quarter-on-quarter fall. In response to these results, Kweichow Moutai stated that the company demonstrated strong resilience amid cyclical and structural adjustments in the industry, laying a solid foundation for achieving its annual targets.

Revenue Growth Without Profit Expansion

Kweichow Moutai's 2026 first half exhibited a pattern of revenue growth without profit expansion, with operating revenue up 1.47% while net profit attributable to shareholders fell 1.95% and non-recurring net profit dropped 2.04%. Financial data indicates that despite declines in selling and administrative expenses, the revenue increase and profit decrease were primarily driven by a sharp rise in operating costs. In the first half, the company's operating costs reached 9.474 billion yuan, up 21.81% year-on-year. The company attributed this to higher sales volumes and increased production costs.

Industry analysts suggest that the slight revenue growth alongside a modest profit decline stems from multiple factors. On one hand, the company is advancing product structure and pricing system reforms, with higher-margin non-standard Moutai products experiencing reduced volumes and prices, bringing per-ton revenue back to market-appropriate levels. On the other hand, the industry faces challenges such as weak consumer demand and channel inventory pressure, prompting the company to proactively control supply and stabilize prices. Additionally, the second-quarter price increases for Moutai liquor at both factory and direct sales levels raised the tax base for consumption taxes, boosting taxes and surcharges. The financial report shows that Kweichow Moutai's taxes and surcharges for the first half of 2026 totaled 14.682 billion yuan, an increase of 740 million yuan from the same period last year.

In the first half of 2026, Kweichow Moutai further expanded its direct sales channels. "Expanding direct sales channels raises operating costs, including logistics, warehousing, storefronts, and customer service. Additionally, labor and manufacturing costs are increasing," noted Ouyang Qianli, a researcher in the liquor industry and founder of Qianli Think Tank. In stark contrast to the profit decline, the company's cash flow was exceptionally strong. Net cash flow from operating activities in the first half reached 70.691 billion yuan, a massive 438.84% year-on-year increase. By the end of June, the company's cash balance stood at 184.811 billion yuan, up 46.18% from the start of the year. This robust cash flow provides ample ammunition for the company to navigate market fluctuations and advance market-oriented reforms.

Modest Growth in Moutai Liquor Revenue

From a business segment perspective, the anchoring role of Moutai liquor continued to stand out. In the first half, Moutai liquor achieved revenue of 77.724 billion yuan, up 2.82% year-on-year. Moutai sauce-flavored series liquor recorded revenue of 12.934 billion yuan, a 6.02% year-on-year decline. The modest revenue growth in Moutai liquor is closely tied to its first price increase this year. On March 30, 2026, Kweichow Moutai officially announced an increase in the sales contract price and self-operated retail price of its 53% vol 500ml Feitian Moutai liquor, raising the long-standing 1,499 yuan self-operated retail price to 1,539 yuan, marking the first price hike for self-operated channels since 2018.

Entering the second quarter, the pace of price increases accelerated. On May 16, the iMoutai App raised prices for non-standard products, including 15-year aged Moutai, premium Moutai, zodiac Moutai (Zhenxiang edition), and kilogram Moutai, with increases ranging from 1.91% to 8%. In the first half of 2026, Kweichow Moutai's domestic dealers saw a net decrease of 46, primarily attributed to series liquor dealers.

Direct Sales Share Continues to Rise

The most striking aspect of the first-half financial report was the explosive growth of direct sales channels, particularly iMoutai. During the reporting period, the company achieved liquor revenue of 40.264 billion yuan (excluding tax) through its iMoutai digital marketing platform, a 274.18% year-on-year increase, accounting for 43.63% of total revenue and 77.49% of direct sales revenue. Looking back at the first quarter, iMoutai's performance had already shown promise, with revenue of 21.553 billion yuan, up 267.16% year-on-year, representing 73% of direct sales revenue.

The rise of iMoutai is reshaping Moutai's channel landscape. Ouyang Qianli believes the key takeaway from the 2026 half-year report is not the growth rate but the structural shift. "iMoutai's revenue share of 43.63% means nearly half of Moutai liquor has bypassed traditional channels to reach consumers directly. This is not a simple channel migration but a reallocation of pricing power, voice, and reach. Moutai is using a direct-to-consumer (To C) approach to activate real demand, rather than relying on inventory pressure on dealers to sustain future growth," he said.

In 2025, Kweichow Moutai's direct sales channels achieved full-year revenue of 84.543 billion yuan, up 12.96% year-on-year, with revenue share exceeding 50% for the first time, surpassing traditional wholesale agency channels. With the deepening of market-oriented reforms aimed at "full direct-to-consumer," in the first half of 2026, the company's direct sales channel revenue reached 51.962 billion yuan, up 29.87% year-on-year, accounting for 57.29% of total revenue. The rising share of direct sales indicates the company's enhanced control over channels.

Looking ahead to the second half, the market generally holds a relatively optimistic outlook. In July this year, after the second price increase for Feitian Moutai liquor (effective from midnight on July 18, the retail price of 53% vol 500ml Feitian Moutai on the iMoutai platform rose from 1,539 yuan per bottle to 1,639 yuan, and the sales contract price increased from 1,269 yuan to 1,369 yuan, both up by 100 yuan), the wholesale price has stabilized above 1,700 yuan, rising to 1,730 yuan in August. The peak demand during the Mid-Autumn Festival and National Day holidays is expected to boost sales, combined with a low base effect from the second half of 2025. In the second half of 2026, Kweichow Moutai's performance is expected to improve quarter by quarter.

Central Huijin and China Securities Finance Exit Top Shareholders, China Life Increases Holdings

The report shows that by the end of the second quarter, Central Huijin Asset Management Co., Ltd. (Huijin Asset) and China Securities Finance Corporation (CSF) collectively exited Kweichow Moutai's top 10 shareholders. The first-quarter report had shown that Huijin Asset held 10.3971 million shares, accounting for 0.83% of total shares, while CSF held 4.0375 million shares, representing 0.32%. In the second quarter, a general insurance product under China Life Insurance Company Limited increased its holdings of Kweichow Moutai by more than 2.91 million shares, bringing its total stake to over 5.58 million shares.