Root Cause of Kweichow Moutai's Cyclical Crisis and Evaluation of the Effectiveness of Traditional Response Strategies

The cyclical crisis of Kweichow Moutai (600519) is mainly manifested in three aspects: the stock price has dropped by 27.69% from the 2021 high of 2216.96 yuan to 1410.00 yuan [0]; Feitian Moutai fell below the official guide price of 1499 yuan in December 2025 [1]; management acknowledged in the third quarter earnings call that the industry is undergoing deep adjustment and channel pressure is significant [1]. The root cause of the crisis is supply-demand imbalance: dealers transfer unsold offline inventory to online platforms for sale, combined with weak consumer demand amid economic adjustments [1]. Regarding traditional response strategies, price reduction has been achieved spontaneously by the market (Feitian Moutai’s price is below the guide price) [1], but there is a risk of diluting the high-end brand image; the company plans to “improve deployment” to adjust supply (i.e., reduce shipments) [1], which can directly alleviate channel inventory pressure and has certain effectiveness in historical cycles.

1. Crisis Nature
   : Moutai’s decline is caused by company/industry-specific factors; the Shanghai Composite Index rose by 9.22% in the same period [2], excluding the impact of the macro overall market.
2. Cyclical Commonality
   : Investors compare Moutai with the historical cyclical crises of Dong-E-E-Jiao and Li-Ning, highlighting the universality of consumer enterprises being constrained by supply-demand cycles.
3. Strategy Balance
   : Although traditional strategies can alleviate pressure in the short term, in the long term, it is necessary to balance the impact of price reduction on the brand and the potential impact of shipment reduction on revenue.

: Price reduction may damage the brand’s high-end positioning; shipment reduction may lead to short-term revenue decline; continued economic adjustments affect consumer demand.
: The current P/E ratio of 19.49x is at a historical low [0]; management has taken proactive measures to adjust supply; the long-term consumer demand in the baijiu industry remains resilient.

Kweichow Moutai (600519) is in a cyclical crisis driven by supply-demand imbalance. Traditional strategies of price reduction and shipment reduction have been partially implemented, among which shipment reduction may directly alleviate channel pressure. Investors need to combine the company’s strong fundamentals with cyclical challenges to carefully evaluate market trends.