The moment when the price of a share of Kweichow Moutai = a bottle of Feitian Moutai has arrived.

As the economy is affected by the epidemic, A-share funds chasing high-quality listed companies and big consumer trends continue to "drink Moutai."

Kweichow Moutai's stock price frequently hits new highs and continues to set new milestones.

On June 23, the total market value of Kweichow Moutai surpassed ICBC for the first time, ranking first in the total market value of A-shares.

On July 6, the share price of Kweichow Moutai, the “stock king”, rose to 1,600 yuan, and its market value exceeded 2 trillion yuan for the first time.

Compared with its international peers, the market value of Kweichow Moutai, with more than 95% of its revenue coming from China, exceeds the combined market value of global alcohol giants Diageo and Anheuser-Busch InBev, and has surpassed Coca-Cola to become the No. 1 market value in the global food and beverage industry.

Kweichow Moutai's high market capitalization has become increasingly controversial as its share price soars.

Some people think that Moutai's business model is successful and there is still room for improvement in market value; others think that Moutai's valuation is too high and there is a bubble.

Is Moutai, with a market value of 2 trillion, overvalued?

Why is the performance so outstanding?

Affected by the epidemic, domestic alcohol consumption generally declined in the first quarter of this year.

Data from the National Bureau of Statistics show that total retail sales of tobacco and alcohol decreased by 14% in the first quarter.

Due to the shutdown of the catering industry and the reduction of gatherings, most liquor companies have experienced significant declines in both revenue and profits.

But for Moutai, the impact of the epidemic has been minimal.

In the first quarter, Moutai's operating income increased by 13% year-on-year to 25.2 billion yuan, and profits also increased by 17% to 13 billion yuan.

In terms of stock price performance, Moutai's stock price only experienced a short adjustment and then continued to climb to new highs.

When the catering industry is generally shut down and consumption scenes such as gatherings and family visits disappear, how can Kweichow Moutai's performance stand out?

The reason can be considered from both the demand side and the supply side.

From the demand side, the consumption power of domestic high-consuming groups has not been significantly weakened due to the impact of the epidemic.

Zhang Jian, a secondary market investor, told Yiou that Moutai can be said to be a representative of China's typical high-end consumption. Moutai's rising logic is directly linked to the consumption power of China's high-consumption groups.

Because its main consumption scene occurs before New Year’s Eve, the overall impact is relatively small.

"The higher the social circle, the more high-end wine is needed to show the importance to the guests or the people being entertained. The price of more than 2,000 yuan is not too high, but the supply exceeds the demand." Maotai's social attributes are at the gatherings of high-end circles.

A kind of awareness has been formed, which is the direct impact of brand premium.

The Hurun Research Institute’s research report also pointed out that high-end liquor will continue to develop at a high speed, benefiting from consumption upgrades and the expansion of high-net-worth people.

Around the Dragon Boat Festival, the entire liquor industry has also shown signs of rebound.

According to analysis by the China Liquor Industry Association, the current sales of the liquor market have improved significantly. Although they are still not as good as last year, most large merchants said that sales in June have returned to the same period last year.

The rebound in liquor sales has driven up liquor prices to varying degrees.

According to research by Huaan Securities, the wholesale price of 53-degree Feitian Moutai (500ml) has risen from the post-epidemic low of less than 2,000 yuan/bottle to the current 2,400 yuan, and the wholesale price of the eighth-generation classic Wuliangye (Puwu) has risen to 940 yuan/bottle.

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From the supply side, in recent years, Kweichow Moutai's production capacity has been unable to meet the geometric growth in demand. Feitian Moutai has always been in short supply, and prices have naturally risen.

A Moutai dealer in Beijing told Yiou, "Currently, the price of Feitian Moutai dealers is generally 2,500-2,600 yuan, and the price in terminal stores is around 3,000 yuan. Without a specific circle, it is difficult for ordinary people to buy real Moutai.

"According to Tencent Securities, in 2020, the batch price of Moutai reached 2,183 yuan, and the profit margin of the channel reached 125%. The shipping price of some dealers was more than 2,600 yuan, which is basically the same as the caliber of Moutai dealers.

In addition, the collective "volume reduction" of liquor companies has also contributed to the increase in the price of high-end liquor.

"The higher the price, the more you buy" is a characteristic of high-end liquor. Increasing the price of liquor by manufacturers can stimulate consumer demand for high-end liquor consumption, and the increase in demand further drives up the price of liquor, thus forming a sustainable consumer willingness to purchase.

Zhong Wei, chief economist of Datang Fortune, said, "The test of wine companies is not the expansion of production capacity, but the company's ability to raise prices and distribute profits in the sales process." Since 2016, Kweichow Moutai has been

This price increase has triggered a wave of price increases among domestic wine companies. Many wine companies, including Wuliangye, Luzhou Laojiao, Shanxi Fenjiu, and Gujing Gongjiu, have shrunk their product lines and focused on high-end series.

According to the calculation of the financial reports of 17 A-share listed liquor companies, the overall net sales profit margin of my country's liquor industry in 2019 and 2020Q1 were 35.59% and 40.91% respectively, and profitability has been further improved.

It is worth mentioning that in addition to the drinking function and social attributes of alcoholic beverages, the investment attributes of high-end liquor have become increasingly prominent.