On the evening of August 14, the once-revered "stock king" Kweichow Moutai Co.,Ltd. released its 2026 half-year report, sparking widespread disappointment and a chorus of bearish sentiment across the market. Online discourse was flooded with claims of a "fallen empire," the end of an era, and abandonment by state-backed funds, with these narratives intensifying over the weekend. However, this perspective is not shared by all. The company's semi-annual results, set against the backdrop of an industry still deep in adjustment, show a performance decline that has not significantly exceeded the "threshold." In fact, it may have widened the gap with competitors such as Luzhou Laojiao, Wuliangye, and Fenjiu. More importantly, by listing the high-volume 500ml Feitian Moutai on its iMoutai app earlier this year and adjusting its pricing system, the company has managed to halt the multi-year downward trend in Feitian's wholesale price (terminal price), firmly regaining control over terminal pricing power. While the adjustment in the baijiu industry may not be over due to economic shifts and changing consumer demographics, the "most dangerous moment" for Kweichow Moutai Co.,Ltd. has likely passed. With the impact of a second, more significant price hike in July set to take effect, combined with a low base from the same period last year, the company's growth rate in the second half of the year and for the full year could see a notable acceleration.

In the first half of 2026, Kweichow Moutai Co.,Ltd. reported total revenue of 92.278 billion yuan, up 1.3% year-on-year, with net profit attributable to shareholders falling 1.95% to 44.517 billion yuan. Core net profit (excluding non-recurring items) was 44.464 billion yuan, down 2.04% year-on-year. In the second quarter alone, revenue was 37.575 billion yuan, a 5.23% decline, with net profit attributable to shareholders down 6.90% to 17.224 billion yuan, and core net profit dropping 7.1% to 17.224 billion yuan. Two key characteristics emerge from these figures: a mismatch between revenue growth and profit decline, and that the first-half profit slump was primarily driven by the second quarter. The profit decline despite revenue growth stems from rising operating costs and a slight dip in gross margin. Operating costs surged from 7.777 billion yuan in the first half of last year to 9.474 billion yuan this year, a 22% increase, significantly outpacing revenue growth. The gross margin fell from 91.3% in the first half of last year to 89.56% this year, a drop of nearly two percentage points. This is a combination of three factors—rising production costs, cost structure changes from channel reforms, and shifts in product sales mix—a scenario almost unprecedented in Moutai's decades of financial history. The second-quarter decline was due to a high base from the previous year and the seasonally weak sales period. The first price hike for Feitian Moutai on March 31 added revenue, but not enough to offset the drop from lower sales volumes. In 2025, facing an accelerating industry adjustment, Moutai, then under the leadership of Zhang Deqin, still set a target of "approximately 9% growth in total operating revenue" for the year, forcing an aggressive start. In the first and second quarters of 2025, revenue growth was 10.67% and 7.26%, respectively, with net profit growth at 11.64% and 5.23%. However, momentum waned in the second half; the third quarter saw stagnation in revenue and profit growth, and in the fourth quarter, under new chairman Chen Hua, the company abandoned the 9% growth target entirely, with revenue and net profit falling 19.35% and 30.34%, respectively.

The more significant takeaway from this interim report is the near-completion of channel reforms and the successful restructuring of the pricing system, allowing the company to firmly control terminal pricing power. Starting in 2016, the market price of Feitian rose from over 800 yuan per bottle, peaking at 3,800 yuan for loose bottles and over 4,000 yuan for cases in 2021, with the stock hitting a record high of 2,827.88 yuan in February 2021. In 2022 and 2023, wholesale prices began to fluctuate and slowly decline, with cases hovering around 3,000 yuan and loose bottles fluctuating around 2,600-2,700 yuan. The decline accelerated in 2024, with loose bottles falling below 2,500 yuan in June, then to 2,270 yuan in September, and cases dropping below 2,400 yuan, continuing to year-end. 2025 saw the most severe price collapse: loose bottles fell below 2,000 yuan in June, 1,700 yuan in late October, and 1,600 yuan in late November, eventually hitting a historic low of 1,485 yuan for loose bottles and 1,495 yuan for cases in December, both below the official guide price of 1,499 yuan. In response, Kweichow Moutai Co.,Ltd. made a critical decision: starting January 1, 2026, it began selling the flagship 500ml Feitian Moutai at the official price of 1,499 yuan on its iMoutai platform. The daily sell-out of these products stabilized market expectations and lifted wholesale prices. Subsequently, on March 31, the company implemented its first price hike of the year, ending the 1,499 yuan era. The dealer contract price (ex-factory price) rose from 1,169 yuan to 1,269 yuan per bottle (+100 yuan), and the retail price in the self-operated system increased from 1,499 yuan to 1,539 yuan per bottle (+40 yuan). On May 16, Moutai raised prices for several non-standard products, including aged Moutai (15 years), premium Moutai, 1-liter Feitian, and the Ma Year Special Edition. On July 18, the second official price hike for Feitian Moutai occurred: the iMoutai platform retail price rose from 1,539 yuan to 1,639 yuan per bottle (+100 yuan), the dealer contract price from 1,269 yuan to 1,369 yuan per bottle (+100 yuan), and the 1-liter Feitian from 3,119 yuan to 3,269 yuan per bottle (+150 yuan). On August 8, all 42 offline direct-sale stores nationwide adjusted prices uniformly, with Feitian Moutai rising to 1,753 yuan per bottle, the classic Ma Year zodiac edition to 1,950 yuan, and premium Moutai to 2,410 yuan. These adjustments have created a three-channel system—online iMoutai, offline direct-sale stores, and wholesale agency—with three parallel pricing tiers: online prices provide a floor, offline direct-sale prices act as a ceiling, and wholesale prices fluctuate within a range. After direct sales revenue surpassed wholesale channels for the first time in 2025, its share of revenue continues to rise quarter by quarter, and terminal product prices have stabilized. The half-year report shows that direct sales channel revenue reached 52.007 billion yuan in the first half, up 29.91% year-on-year, with its share rising 12.41 percentage points to 56.36%. In the second quarter, direct sales revenue was 22.503 billion yuan, up 33.86%, accounting for about 59.89% of total revenue. iMoutai generated 40.264 billion yuan in pre-tax liquor revenue, a 277.18% increase, representing about 43.63% of core business revenue; in the second quarter, iMoutai revenue was 18.711 billion yuan, up 282.61%, jumping to about 49.8% of core business revenue. In the short term, despite two price hikes, the flagship 500ml Feitian on iMoutai remains in high demand, and the positive effects of the larger price increase in the second half are likely to be reflected in the third-quarter and full-year results. Looking long-term, while some argue that younger generations do not drink Moutai, the key point is that they never consumed it heavily. As long as Chinese culture values face and "high-end occasions" demand Moutai, there is little to worry about. Recently, investor Duan Yongping made a bold bet on Moutai—a testament to the confidence of long-term believers, a stance that seems well-founded.