What Chinese liquor maker Moutai's slump says about the country's economy

Kweichow Moutai, mainland China’s largest listed company by market capitalization from 2020 to 2023, reported first-half net profit of 44.5 billion yuan ($6.6 billion), down 1.95%. Wind Information said it was the first first-half decline since 2014 and only the second since comparable data began in 2002. Net profit fell 4.5% in 2025, the first annual decline on record. Ba Luo Fund manager Ye Yuhua linked the weakness to China’s economic shift. Second-quarter growth was the weakest since the fourth quarter of 2022, while urban fixed-asset investment, including real estate and infrastructure, declined 5.7% year over year in the first six months. Anti-corruption measures have weighed on retail sales, while 2020 borrowing restrictions weakened a construction-heavy sector that had represented a quarter of the economy. Ye said technology workers are less inclined to consume 53% alcohol baijiu and called the market saturated. Moutai shares briefly fell after the semiannual report, bringing year-to-date losses to 5.7%; the stock has declined annually for four consecutive years. State funds Central Huijin and China Securities Finance exited the 10 largest holders. Citi said sentiment likely troughed, retained its “buy” rating and attributed the decline mainly to Moutai’s shift from wholesale to direct-to-consumer sales rather than weak demand. Moutai’s roughly 90% gross margin, profitability and stable dividend remain institutional attractions, while Morningstar called it its preferred Chinese baijiu pick. The Mid-Autumn Festival could support second-half earnings. Moutai implemented two price increases this year, with the second taking effect July 18. Morningstar forecasts 8% annual profit growth from 2025 to 2030. China Asset Management strategist Wenjie Ding cited net outflows from food-and-beverage ETFs with significant baijiu exposure. Meanwhile, technology stocks have overtaken Moutai. Newly listed memory-chip maker CXMT has a market value about 2.5 times larger, underscoring the market’s shift toward innovation, high growth and global competitiveness.