The Financial Services Association announced on September 20 that in 23 years since listing, Kweichow Moutai, a major dividend company, announced the repurchase of shares for the first time.

This evening, Kweichow Moutai issued an announcement stating that the company plans to repurchase the company's shares through centralized bidding transactions. The repurchase amount is 3 billion yuan to 6 billion yuan. The capital is the company's own funds. The repurchase of shares is used to cancel and reduce the company's registered capital. The repurchase price of the shares shall not exceed 1795.78 yuan/share (inclusive). The repurchase period of the shares is within 12 months from the date the company's shareholders' meeting deliberates and approves the repurchase plan.

According to the announcement, based on the current total share capital of the company of 1.256 billion shares, based on the total repurchase capital not less than RMB 3 billion (inclusive) and no more than RMB 6 billion (inclusive) and the upper limit of the repurchase price of 1795.78 yuan/share, the number of changes in share capital is expected to decrease by 1.6706 million shares to 3.3412 million shares. After the repurchase and cancellation, the total share capital of the company is expected to decrease to 1.255 billion shares to 1.253 billion shares.

According to the announcement, as of June 30, 2024, the company's total assets were RMB 279.207 billion, net assets attributable to shareholders of listed companies were RMB 218.576 billion, and cash and cash equivalents were RMB 145.267 billion. Assuming that the maximum capital limit of RMB 6 billion for this share repurchase has been used, the repurchase capital accounts for about 2.1489% of the company's total assets as of June 30, 2024, 2.7450% of the net assets attributable to shareholders of the listed company, and 4.1303% of cash and cash equivalents.

Kweichow Moutai stated in the announcement that the purpose of this share repurchase is to protect the interests of the company and investors and enhance investment confidence.

Historically, Kweichow Moutai mainly gave back to investors in the form of dividends, and is a famous major dividend holder. According to Wind data, the cumulative dividend amount since Kweichow Moutai went public is 232.6 billion yuan. On August 8, 2024, Kweichow Moutai announced the “2024-2026 Cash Dividend Return Plan”. From 2024 to 2026, the total amount of cash dividends distributed by the company each year is not less than 75% of the net profit realized to mother in that year. In principle, dividends are paid twice a year.

This buyback is also seen as an important means of maintaining Kweichow Moutai's stock price. This year, Kweichow Moutai's stock price trend was weak. Since May, the stock price showed a clear downward trend. Yesterday, the lowest price reached 1245.83 yuan/share, a new low in nearly 4 years. As of today's close, Kweichow Moutai's stock price closed at 1263.92 yuan/share. This year, the stock price dropped by more than 25%.

Apart from the stock price, the price of Maotai liquor is no longer strong. According to the latest wholesale reference price revealed today, the price of Flying Moutai in 2024 was 2,365 yuan/bottle, the same as the previous day; in 2024, the original box of Flying Moutai was reported at 2,470 yuan/bottle, down another 20 yuan from the previous day.

Furthermore, according to reports, several scalpers in Beijing revealed that they are no longer recycling Maotai in the Year of the Dragon, saying that its wholesale price has fallen below the sale price (2,499 yuan/bottle), and wine merchants are concerned about Maotai's subsequent price trend.

Wine industry commentators said that changes in the Maotai market prices are still mainly affected by changes in the market and economic environment. Currently, recycling prices for Shede, Guojiao 1573, and Wuliangye are also sluggish, and scalpers have even begun to refuse cultural and creative products from all wineries. It is expected that from “11th” to the Spring Festival this year, demand for liquor will remain relatively sluggish, and the details will have to be waited and seen.