Citibank: The second round of price increases for Moutai this year brings surprises, and the path of channel reform is becoming clearer.

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Guizhou Moutai has once again strengthened its market pricing dominance with an unexpected price increase.

After the close on July 17, Moutai suddenly announced that, starting July 18, it will raise both the ex-factory wholesale price and the direct retail price of Feitian Moutai (53 degrees, 500ml) by 100 yuan each. After adjustment, the ex-factory wholesale price rises to 1,369 yuan (an increase of about 7.9%), and the direct retail price rises to 1,639 yuan (an increase of about 6.5%). Notably, the adjusted direct retail price (1,639 yuan) is now very close to the recent market first-batch price (about 1,640 yuan), indicating that Moutai is proactively narrowing the price gap between ex-factory and market prices.

Citi Research believes that this price increase not only exceeds market expectations, but also clearly conveys Moutai's strategic intent to accelerate the transformation of direct sales channels and compress dealer speculation space, and continues to be optimistic about Moutai’s relative allocation value compared to Wuliangye. Analysts maintain a buy rating for Moutai, with a target price of 1,788.65 yuan and a potential return (including dividend) of 47%.

What’s different about the second price increase: Simultaneous and equal adjustment of ex-factory and direct retail prices

The structure of this price increase is different from the first round on March 31 this year.

In the first round, the ex-factory wholesale price was raised by 100 yuan, while the direct retail price was increased by only 40 yuan, showing a difference in magnitude; this time, both prices are simultaneously and equally raised by 100 yuan, demonstrating a more mature price anchoring logic in Moutai’s direct sales system construction.

According to Citi Research, Moutai’s principle for this price increase is "following market trends, maintaining relative price stability, matching supply and demand, balancing volume and price." Since Moutai announced its "market-oriented 2026 operational plan" and channel reform in January this year, the first-batch market price has steadily rebounded from below 1,600 yuan in December 2025 to about 1,640 yuan recently. The gap between ex-factory and market prices has been continually narrowing.

Citi believes that the core logic behind Moutai’s price increase is: by compressing the price gap between ex-factory and market prices, it weakens the arbitrage space of unauthorized dealers while promoting a sales structure that leans towards direct-to-consumer (DTC) channels, thereby reducing the risk of excess channel inventory accumulation.

Market-oriented channel reform: Direct sales as anchor, diversified layout

On January 13 this year, Moutai released a transformative channel reform plan, with its core framework divided into three dimensions: product, channel, and pricing.

At the product level, Moutai reaffirmed its “pyramid” product structure, with the Feitian series as the foundation, premium and zodiac liquors as mid-tier pillars, and year and heritage series positioned to secure ultra-high-end status with tightened supply; the 43-degree Feitian is positioned as a supplementary product for specific occasions, regions, and younger consumers.

At the channel level, Moutai has built a multi-mode distribution system of "direct retail + dealer wholesale + commission-based partnership + consignment," and reorganized the market operation into five major segments: wholesale, offline retail, online retail, catering, and private domain, strengthening the integration of "online + offline." The online channel focuses on improving consumer reach efficiency, while the offline channel is focused on sales conversion and service.

At the pricing level, Moutai has introduced a market-oriented "relatively stable" dynamic pricing mechanism for the direct sales system (including iMoutai and self-operated offline stores), using the direct sales price as the anchor, which informs contract pricing and commission standards for dealers and consignment arrangements.

In terms of valuation, Citi sets Moutai's target price at 1,788.65 yuan based on a 2026 expected PE of 25x (referencing the average of global spirits peers), believing Moutai, relying on the strongest brand power, highest profit margins, best capital returns, and strongest free cash flow, has the foundation to enjoy a valuation premium in the baijiu industry.

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