Guizhou Moutai fell more than 2% in early trading today, hitting a new low in nearly a year and a half. In the afternoon, the market rebounded, and Guizhou Moutai's stock price turned red at the end of the day. As of the close, Guizhou Moutai closed at RMB 1,555/share, with no change today, and a market capitalization of RMB 1.95 trillion.

Since May 8th, the stock price of Moutai has dropped more than 12%, evaporating a market value of RMB 270 billion, equivalent to the total market value of 2.5 Tsingtao breweries.

The catalyst for the drop in Moutai's stock price was that during the Dragon Boat Festival, Moutai's scalpers suddenly collectively raised prices.

Since April, the wholesale price of Feitian Moutai has continued to fall; and during the recent 618 online shopping festival, there were also incidents such as the 'Huangmao uprising'.

According to the latest reference price disclosed by today's wine price, the reference wholesale price of Feitian Moutai loose bottle fell from RMB 2420 from the previous day to RMB 2230, a drop of nearly 200 yuan in a single day. The reference wholesale price of Feitian Moutai in the original box also fell from RMB 2695/bottle to RMB 2550/bottle, down more than 100 yuan in a single day, and the decline speed has accelerated compared to the previous few days.

Several Moutai scalpers reported that due to the unstable prices in recent days, they have temporarily stopped buying back Feitian Moutai.

Some liquor merchants have said that the billions of subsidies launched by e-commerce companies during the 618 online shopping festival have had the greatest impact on the terminal prices of Feitian Moutai. The bubble in Feitian Moutai's terminal market price itself is relatively large, and it is more susceptible to the impact of the market under the weak domestic consumer market for Baijiu products than other white liquor products.

It is rumored that it was Gan-deng who turned around Moutai. Some people believe that the rise of Gan-deng has hit the sales of white liquor. Now not playing Gan-deng while eating is equivalent to not eating.

A staff member of the securities department of Guizhou Moutai said that the company has been paying attention to changes in stock and wine prices, and that production and operation are normal at present. As for whether there are any countermeasures, it is not convenient to respond, but please believe in the company.

In response to Moutai's unexpected rapid decline, Moutai shareholder and well-known investor Duan Yongping remains optimistic about the stock. He replied to netizens on social media, saying:

People who like to drink Moutai will not stop drinking it because of the drop in market price, but the activity of business events may have decreased a little, so they may be drinking a little less. People who like Guizhou Moutai's company should be happier as the stock price is lower.

Duan Bin proposed to split Moutai's stocks again. Duan Bin stated that the stock split and buyback and cancellation culture in the U.S. stock market has promoted the market value growth of enterprises. For those who oppose Moutai's split, I really don't know what they are thinking. Now Moutai keeps falling and crying, obviously there is a good way to do it in the mature market, but they refuse to use it, and they seem to be arrogant and unreasonable... Duan Bin used Broadcom's stock price as an example. In the second quarter, its performance exceeded expectations and raised its full-year performance guidance. It also announced a 1-to-10 stock split plan and rose 14.75% after-hours.

At this year's Guizhou Moutai 2023 Shareholders' Meeting, Yang Delong, chief economist of Qianhai Kaiyuan Fund, suggested publicly to the management of Guizhou Moutai to split the company's stocks, but it was opposed by many shareholders at the meeting, and the company's management did not respond to the proposal.

White liquor stocks fell this week. From the ETF perspective, as of June 14th, Penghua's liquor ETF fell more than 3% this week and more than 4% this month; Tianhong's food ETF, Huatai's food and beverage ETF, CMB food and beverage ETF, Yin-hua's food ETF, Huaxia's food and beverage ETF, and Huabao's food ETF all fell more than 2% this week and more than 3% this month.

Some funds are taking advantage of the decline in white liquor by investing in ETFs. As of June 13th, Penghua's liquor ETF attracted more than 700 million yuan in June.

Regarding the white liquor sector, Galaxy Securities believes that the drop in Moutai's wholesale price is more of a process of divesting financial attributes, while prices of white liquor products below Moutai remain stable and have sufficient consumer demand support. From the perspective of the industry cycle, we believe that at least the leading brands have gone through their darkest moments; from the perspective of the sustained increase in industry concentration, the growth of leading brands' performance is more certain in the medium-term. The decline in the wholesale price of Moutai has caused a correction in the stock prices of white liquor companies, and now companies with α attributes have low valuations.