Analysis Report on Inventory Turnover and Investment Value of Kweichow Moutai
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Based on the latest financial data [0], Kweichow Moutai (600519.SS) has seen a continuous downward trend in its inventory turnover rate:
| Report Period | Inventory Turnover Rate | Inventory Turnover Days |
|---|---|---|
| 2020 | 0.303 | Approximately 1,205 days (3.3 years) |
| 2021 | 0.290 | Approximately 1,259 days (3.4 years) |
| 2022 | 0.280 | Approximately 1,304 days (3.6 years) |
| 2023 | 0.276 | Approximately 1,322 days (3.6 years) |
| 2024 | 0.254 | Approximately 1,437 days (3.9 years) |
According to data from KPMG’s 2025 Mid-term Research Report on China’s Baijiu Market [1], the average inventory turnover days in the baijiu industry have reached 900 days (approximately 2.5 years), and Moutai’s inventory turnover days are significantly higher than the industry average.
Moutai’s low inventory turnover rate
- Aging Process Requirements: Moutai requires at least 5 years of aging from production to release, which is the technical foundation of the product’s quality [1]
- Strategic Base Liquor Reserve: Inventory mainly consists of base liquor and aged liquor, which are the company’s core assets and guarantee for future production capacity
- Time Value Attribute: The base liquor of high-end baijiu has the characteristic of “the longer it ages, the more aromatic and valuable it becomes”, so the inventory itself is an appreciating asset
According to the KPMG report [1], the current baijiu industry is facing:
- High Inventory Pressure: The industry’s average inventory turnover days have reached 900 days, an increase of 10% year-on-year, with inventory volume increasing by 25% year-on-year
- Widespread Price Inversion: 60% of enterprises have experienced price inversion, reflecting market supply-demand imbalance and channel pressure
- Weak End Demand: Retail and catering revenue only grew by 3.0%, and dealer inventory has reached a historical high
| Enterprise | Inventory Turnover Rate | Inventory Turnover Days | Trend |
|---|---|---|---|
| Kweichow Moutai | 0.254 | Approximately 1,437 days | ↓ Declining |
| Wuliangye | Approximately 0.35-0.4 | Approximately 900-1,000 days | → Stable |
| Luzhou Laojiao | Approximately 0.3-0.35 | Approximately 1,000-1,200 days | → Stable |
Moutai’s turnover rate is lower than that of its peers, but it should be noted that its product positioning is more high-end and its production cycle is longer.
| Indicator | Value | Industry Position |
|---|---|---|
| Return on Equity (ROE) | 36.48% |
Top Tier |
| Net Profit Margin | 51.51% |
Highest in the Industry |
| Operating Profit Margin | 71.37% |
Excellent |
| Current Ratio | 6.62 |
Extremely Healthy |
| Quick Ratio | 5.18 |
Adequate Liquidity |
| Debt-to-Equity Ratio | 10.09% |
Extremely Low Financial Risk |
- ✅ Inventory mainly consists of high-value base liquor, not unsold goods
- ✅ The company has sufficient liquidity (current ratio 6.62) and no pressure to liquidate inventory
- ✅ ROE and profit margin indicators show extremely strong profitability
- ✅ Although its financial stance is labeled “aggressive”, debt risk is low
- ⚠️ Continuous downward trend in inventory turnover rate (16% decline over 5 years)
- ⚠️ Low cash conversion rate of core profits (only 0.15 in the first three quarters) [1]
- ⚠️ Significant 74% decrease in net operating cash flow [1]
- ⚠️ Weak recent stock performance (YTD -3.09%, 1-year -5%)
-
Inventory Quality Perspective: Moutai’s inventory is mainly strategic base liquor reserves, not unsold products. The low turnover rate is instead proof of the “time-brewed” quality of its high-end products.
-
Financial Health Perspective: The company has ample liquidity and extremely low debt risk, so even if inventory liquidation is difficult, it will not cause financial pressure on the company.
-
Industry Cycle Perspective: The current baijiu industry is in a period of adjustment, and inventory pressure and price inversion are common industry issues. Moutai’s risk resistance is significantly stronger than that of small and medium-sized enterprises.
-
Valuation Perspective: The current P/E ratio is 19.23x [0], which is at a historically low level, and the stock price has fully reflected the market’s concerns about inventory pressure.
- Low inventory turnover rate is not a key variable in Moutai investment decisions
- More attention should be paid to changes in the cash conversion rate of core profitsandoperating cash flow
- Moutai’s brand moat and leading industry position remain stable
- The current valuation is relatively attractive, and it is recommended to pay attention to the financial report performance on April 28, 2026
- The industry inventory adjustment cycle may be longer than expected
- Continued pressure on terminal prices may affect ex-factory prices
- There is uncertainty about the pace of consumption demand recovery
[0] Jinling AI Financial Database - Company Overview and Financial Analysis Data of Kweichow Moutai (600519.SS)
[1] KPMG, 2025 Mid-term Research Report on China’s Baijiu Market (https://assets.kpmg.com/content/dam/kpmg/cn/pdf/zh/2025/06/mid-term-research-report-on-the-chinese-baijiu-market-2025.pdf)
[3] LeadLeo Research Institute, 2022 Comparative Analysis Report on China’s High-end Baijiu Enterprises
Insights are generated using AI models and historical data for informational purposes only. They do not constitute investment advice or recommendations. Past performance is not indicative of future results.
About us: Ginlix AI is the AI Investment Copilot powered by real data, bridging advanced AI with professional financial databases to provide verifiable, truth-based answers. Please use the chat box below to ask any financial question.