Guizhou Moutai Launches Major Share Buyback to Boost Market Confidence
On September 20th, Kweichow Moutai issued an announcement, planning to repurchase and retire shares with its own funds, with a financial scale of no less than 3 billion yuan and no more than 6 billion yuan (inclusive), and the upper limit of the repurchase price is 1,795.78 yuan per share (inclusive).
It is expected that the number of repurchased shares will be between 1.67 million and 3.34 million shares, accounting for approximately 0.133% to 0.266% of the company's total share capital.
Kweichow Moutai's repurchase plan follows the release of a three-year cash dividend plan, which allocates cash dividends twice a year with a total amount not less than 75% of the net profit of that year.
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This demonstrates Kweichow Moutai's determination to steadily advance market value management through active market-oriented means, injecting a "strong stimulant" into the current secondary market.
Some institutional investors analyze that from major shareholders' increase, continuous dividends to repurchase and retirement, it indicates that Kweichow Moutai has fully utilized the "toolbox" of market value management, bringing substantial benefits to the market and the company, allowing the company to better cope with market challenges, achieve stable, healthy, and sustainable development, and bring substantial returns to investors.
Currently, Kweichow Moutai has achieved a synchronized increase in intrinsic value and market value through market value management, enabling investors to form a relatively stable expectation of the stock price, obtain relatively stable investment returns, and also contribute to creating a long-term investment and value investment atmosphere.
The liquor industry has entered an adjustment period, and as the industry leader, the actions of Kweichow Moutai have become the industry's weathervane.
This repurchase not only demonstrates the company's support for the stock price but also conveys an optimistic attitude towards the future prospects of the industry to the market through real money, further strengthening investor confidence.
On the one hand, it reflects substantial support and sharing of business results; on the other hand, it also consolidates the position of controlling shareholders, helps to enhance the value of Moutai and increase shareholder returns, and promotes a win-win situation for all parties.
This is also the first time in 23 years since Kweichow Moutai went public that it has implemented the cancellation of repurchased shares, becoming another practical measure to create a benchmark for market value management.
The newly promulgated "Nine National Articles" also mentioned that it will "increase the incentive for high-quality dividend companies and take multiple measures to promote the improvement of the dividend rate" and "guide listed companies to legally retire shares after repurchase".
Industry insiders pointed out that after the repurchase and retirement of shares, the company's share capital will decrease, and financial indicators such as earnings per share, return on net assets per share, etc., will improve accordingly, which is beneficial to the improvement of investor returns.
As of the end of the first half of this year, Kweichow Moutai had 145.267 billion yuan in cash and cash equivalents.
Even if this repurchase costs up to 6 billion yuan, it only accounts for 4.13% of the company's cash and cash equivalents.
Therefore, this repurchase will not have an adverse impact on Moutai's cash flow, daily operations, and future development.
Through this set of market value management "combination punches", Moutai continues to optimize investor relations, steadily build a benchmark image of market value management, and further enhance investors' confidence in the company's future development.
Since Kweichow Moutai went public, Moutai Group and its subsidiaries have increased their own stocks four times.
The first increase was in 2010, when the liquor industry was affected by macroeconomic fluctuations, and market confidence was shaken, and Moutai Group increased its holdings in this context.
The second was in 2012, when the liquor industry faced a trust crisis, and the stock prices of liquor companies fell sharply, and Moutai Group increased its holdings against the trend.
The third was in 2013, although Kweichow Moutai rebounded to some extent in the early stage, it was still in a period of fluctuation and adjustment, and Moutai Group continued to increase its holdings in this context.
The fourth was in 2023, when Moutai Group increased its holdings by 919,600 shares, and Moutai Technology Development Company increased its holdings by 37,600 shares.
Moutai Group and its subsidiaries have increased their own stocks in different market contexts, fully demonstrating Moutai Group's firm confidence in the company's future development and recognition of long-term value.
Affected by the increase of major shareholders, it has continuously attracted funds to increase their holdings.
Kweichow Moutai mentioned in the announcement that the company's major shareholders currently have no plans to reduce their holdings, and if there is an increase in holdings, it will be disclosed in a timely manner according to regulations.
This further shows the company's firm confidence in long-term value.
Looking at the trend of institutional holdings, Kweichow Moutai is still one of the favored targets of funds.
In the first quarter of this year, the flagship fund of the American asset management giant Capital Group, "European Pacific Growth Fund", significantly increased its holdings of Kweichow Moutai, increasing by 386,908 shares compared to the end of 2023.
In the second quarter, Yifangda Long-term Value increased its holdings of Kweichow Moutai by 136,800 shares, making it the fourth-largest heavy stock.
In addition, Jiao Yin Xin Cheng also increased its holdings by 89,800 shares, making Moutai the second-largest heavy stock; Yuanxin Yongfeng Xingnuo One Year Hold, Yuanxin Yongfeng Youjia Life, Qianhai Kaiyuan Shanghai-Hong Kong-Macao Advantage Selection and other products also increased their holdings in the second quarter.
Data shows that as of the end of the second quarter of this year, Kweichow Moutai was held by 1,265 funds, with a total of 80.75 million shares.
So far, many fund products still choose to increase their holdings of Kweichow Moutai, and people such as Yifangda Guo Jie, a well-known writer, Zi Jin Chen, and others are also "supporting" Moutai.
Investment bigwig Duan Yongping recently said on social media, "Looking back 20 years later, Moutai should be much better than gold", showing confidence in Moutai's long-term value.
This year, the Moutai management team has frequently gone deep into various markets for research, constantly adjusting strategies in combination with the actual market.
At the performance explanation meeting, the Moutai management also clearly stated that it will ensure that the annual target of a 15% increase in total business income is completed on schedule.
This is why this year, the Moutai management team has repeatedly gone deep into the first-line markets of various provinces and regions for research, held provincial and regional market work meetings, and communicated with representatives of dealers, e-commerce, group purchases, provincial and regional self-operated and other channels to understand market marketing, channel management, terminal construction, and other situations, continuously improving the systematic and coordinated strategic and tactical system.
From the perspective of the basic situation, the brand value of Kweichow Moutai is still climbing.
In September this year, Moutai ranked second in the BrandZ China Brand List with a brand value of 87.298 billion US dollars.
This not only shows that Moutai's market influence is continuously expanding, but also lays a solid foundation for its internationalization.
Based on this, Kweichow Moutai has built a complete market value management system through repurchase, dividend, increase, and other means, ensuring the synchronized increase of the company's intrinsic value and market performance.
This series of measures is not only responsible for shareholder returns but also sets a benchmark for the healthy development of the liquor industry.
With the in-depth implementation of market value management, Moutai will continue to move forward steadily in the future, promoting the company to achieve sustainable growth.
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