Valuation Logic Differences Between Kweichow Moutai and Cambricon: A Collision of Value Investing and Growth Investing Philosophies

Based on the obtained data and in-depth analysis, I will interpret the investment philosophies reflected in the valuation logic differences between Moutai and Cambricon from multiple dimensions.

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Metric	Kweichow Moutai (600519.SS)	Cambricon (688256.SS)	Multiple of Difference
Price-to-Earnings (P/E)	19.23x	318.79x	16.6x
Price-to-Book (P/B)	6.73x	52.90x	7.9x
EV/OCF	19.61x	-28,481.14x	N/A
ROE	36.48%	25.61%	1.4x
Net Profit Margin	51.51%	33.53%	1.5x
Free Cash Flow (FCF)	+RMB 87.8 billion	-RMB 1.98 billion	N/A

Scenario	Valuation	vs. Current Price
Conservative Scenario	$1,173	-15.1%
Base Case Scenario	$1,734	+25.5%
Optimistic Scenario	$2,928	+111.9%

Scenario	Valuation	vs. Current Price
Conservative Scenario	-$23.93	-101.7%
Base Case Scenario	-$36.94	-102.6%
Optimistic Scenario	-$94.59	-106.6%

Cambricon’s DCF valuation is negative, reflecting that it

and its valuation is highly dependent on expectations of future growth [0].

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Kweichow Moutai represents the classic value investing philosophy, and its valuation is built on the following pillars:

1. Certainty Premium
   • The product has an
     irreplaceable brand moat
   • Stable demand with extremely high price elasticity
   • Financial data shows strong pricing power (operating profit margin 71.37%) [0]

2. Reliability of Discounted Cash Flow
   • Annual free cash flow reaches RMB 87.8 billion
   • Five-year average net profit margin of 55.3%, EBITDA margin of 79.1%
   • Input variables for any DCF model are relatively predictable

3. Margin of Safety in Valuation
   • Current P/E is only 19.23x, lower than the historical average
   • Base case DCF scenario shows 25.5% upside potential
   • Beta is only 0.64, a low-volatility asset

Cambricon represents the typical growth investing philosophy, and its valuation logic is completely different:

1. Driven by Growth Expectations
   • 26.5% revenue CAGR over the past 5 years
   • The AI chip track is in an explosive growth phase
   • 140.55% stock price increase in 2025, over 2300% increase in the past 3 years [0]

2. “Strategic Investment” Amid Losses
   • Current EBITDA margin is -125.8%
   • Negative free cash flow (-RMB 1.98 billion)
   • High Capex (42.2% of revenue) for capacity expansion

3. “Dream Valuation” Method
   • A P/E of 318x means the market pricing is based on
     2028-2029 earnings expectations
   • DCF models are invalid because there is no positive cash flow at present
   • Valuation relies more on “price-to-dream ratio” rather than price-to-earnings ratio

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Dimension	Value Investing (Moutai)	Growth Investing (Cambricon)
Investment Perspective	Current Cash Flow	Future Potential
Holding Period	Long-term (Year-over-Year)	Short-term (Trend-based)
Source of Expected Returns	Cash Flow Compounding + Dividends	Valuation Expansion + Growth
Maximum Risk	Short-term Volatility	Unmet Expectations

• Pursue
  reasonable returns with certainty
• Accept an expected annualized return of 10-15%
• Focus on “not losing money”

• Pursue
  high returns with low probability
• Accept high volatility in exchange for potential doubled returns
• Focus on “not missing out”

Value Investor's Perspective:
├── Financial Data → Free Cash Flow → Intrinsic Value
├── Market Pricing → Below Intrinsic Value → Buy
└── Hold Until Value Regression

Growth Investor's Perspective:
├── Industry Trends → Technological Breakthroughs → Market Space
├── Revenue Growth → Market Share → Long-term Earnings
└── Trend Formation → Chase and Participate

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• Current P/E of 19.23x is in a historical low range (33% decline over 5 years) [0]
• Current ratio of 6.62x, extremely robust financials
• Expected EPS to reach $104-112 in 2029 [0]

• Recent performance slightly below expectations (Q3 EPS -5.3%)
• Pressured consumer environment may affect demand for high-end liquor

The current price has a and is suitable for long-term allocation

• The AI chip track is in an explosive phase
• 144.51% increase in 6 months, strong momentum [0]
• High activity in institutional research

• All DCF valuations are negative, insufficient fundamental support
• Current price deviates 103.6% from the DCF base case scenario
• Once growth expectations are realized, valuation may contract sharply

The current price fully reflects optimistic expectations,

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Investor Type	Risk Preference	Suitable Target	Expected Strategy
Conservative	Low	Moutai	Long-term Holding + Dividend Reinvestment
Aggressive	High	Cambricon	Trend Trading + Strict Stop-Loss
Balanced	Medium	Portfolio Allocation	Core + Satellite Strategy

1. Value Stock Cycle
   : Moutai experienced a long-term bull market from 2013-2023, but consolidated from 2024-2025
2. Growth Stock Cycle
   : Cambricon performed remarkably during the AI boom, but high volatility is the norm
3. Rotation Rule
   : The two styles alternate dominance in different market environments

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The valuation differences between Moutai and Cambricon are, in essence,

:

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
—— Warren Buffett

Behind Moutai’s 19x P/E is the pricing of

.

“Investing is investing in the future, and the future belongs to those who dare to take risks.”
—— Growth Investing Creed

Behind Cambricon’s 319x P/E is the pricing of

.

For

, Moutai provides a predictable return path and lower drawdown risk.

For

, Cambricon provides high-elasticity trading opportunities, but strict precautions against unmet expectations are required.

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[0] Jinling AI Financial Database - Kweichow Moutai (600519.SS) and Cambricon (688256.SS) Company Overview, Financial Analysis, and DCF Valuation Data (2026-01-17)