Kweichow Moutai Co Ltd

Data released by the National Bureau of Statistics on the 27th showed that industrial enterprises' profits in July rose 11.2% year-on-year, slowing from a 15.1% increase in June. While export-oriented companies benefited from the global AI boom, domestically oriented sectors struggled. For the January-July period, industrial profits rose 17.6% year-on-year, compared with an 18.7% increase in the first half. Leading the profit growth in the first seven months were computer, communication and other electronic equipment manufacturing, up 110%, and non-ferrous metal smelting and rolling, up 91.8%. Notably, optical fiber manufacturing surged 468.4%, optical cable manufacturing rose 62.6%, and communication system equipment manufacturing increased 55.0%. In contrast, consumer and real estate-related sectors saw sluggish profit growth due to weak domestic demand, with Kweichow Moutai, China's largest liquor maker by revenue, reporting a 2% decline in net profit for the first half.

Huachuang Yunxin announced that Guizhou Financial Holdings acquired a 5% stake in the company from Kweichow Moutai Group and other Guizhou provincial state-owned enterprises through block trades, and signed a concert party agreement with Logistics Group and Panjiang Coal and Electric Power, bringing their combined holding to 13.11% and making them the company's largest shareholder. After this equity change, Guizhou Financial Holdings and its concert parties hold a total of 290 million shares, of which Logistics Group holds 108 million shares and Panjiang Coal and Electric Power holds 72 million shares. Although the largest shareholder has changed, the company still has no controlling shareholder and no actual controller, because the gap between the largest and second-largest shareholders is small, and Guizhou Financial Holdings and its concert parties have not nominated any directors. In addition, the company's previously disclosed half-year earnings forecast shows that net profit attributable to shareholders of the listed company for the first half of 2026 is expected to be between 220 million and 245 million yuan, an increase of 179% to 211% year on year.

Kweichow Moutai reported a rare 1.95% drop in first-half net profit to 44.5 billion yuan, its first such decline since 2014, as China's economy pivots from real estate to technology. The baijiu maker's full-year 2025 net profit fell 4.5%, its first annual decline on record, and shares have now fallen for four consecutive years. State funds Central Huijin and China Securities Finance exited the top 10 shareholders in the second quarter, while Citi and Morningstar maintained positive ratings, citing a shift to direct-to-consumer sales and expected Mid-Autumn Festival demand. Analysts noted that tech industry participants are less inclined to drink baijiu, making the premium spirits market saturated.

Kweichow Moutai released its 2026 interim report, with net profit attributable to the parent company at 44.517 billion yuan, down 1.95% from the same period last year. Total operating revenue was 92.278 billion yuan, up 1.30% year-on-year, marking a fifth consecutive year of growth. Net cash inflow from operating activities was 70.691 billion yuan, up 438.84% year-on-year. The company's latest gross margin was 89.56%, down 1.74 percentage points from a year earlier, and its latest return on equity was 17.72%, down 1.31 percentage points from a year earlier.

On the evening of August 14, multiple listed companies on the Shanghai and Shenzhen stock exchanges issued announcements covering major matters, half-year results, shareholding changes, and large orders. Keda Manufacturing terminated its purchase of a 51.55 percent stake in Tefu International. Zhongheng Electric's controlling shareholder, Zhongheng Technology Investment, received a capital increase of 4.1 billion yuan from CATL, subscribing to 14.4118 million yuan of new registered capital, and the two sides signed a strategic cooperation agreement. Huashi Technology plans to buy a 30 percent stake in Aoxing Technology for 300 million yuan. Haitong Development's wholly owned subsidiary plans to invest no more than 600 million yuan to build two 62,000 deadweight ton multipurpose heavy-lift vessels. Zhiyang Innovation plans to raise no more than 904 million yuan through a private placement. Fuleide plans to raise no more than 1.176 billion yuan through convertible bonds. In half-year results, Kweichow Moutai posted first-half net profit of 44.517 billion yuan, down 1.95 percent year on year. Satellite Chemical posted net profit of 6.226 billion yuan, up 126.94 percent. Shengyi Technology posted net profit of 3.287 billion yuan, up 130.42 percent. Ping An Bank posted net profit of 25.696 billion yuan, up 3.3 percent, and plans to pay a dividend of 2.49 yuan per 10 shares. China Communications Construction signed new contracts worth 902.949 billion yuan in the first half, down 8.89 percent year on year. In addition, Fuwei Shares received a seat project nomination from a joint-venture brand customer, with an estimated total life-cycle sales value of 2.86 billion yuan. A subsidiary of Shaanxi Construction Engineering won the bid for a 1.156 billion yuan Yunjing Intelligent Computing Center project. A subsidiary of Zhejiang Construction Investment won the bid for a project worth 2.497 billion Hong Kong dollars.

In the second quarter, active equity funds raised their allocations to electronics and communications sectors to 60%, propelling 144 products to double their net value. However, the tech sector took a sharp downturn in July, with doubled funds suffering an average drawdown of 26.9%. By July 26, only eight products retained year-to-date doubled returns. According to data from Industrial Securities, public funds mainly added positions in upstream network communication hardware, chip storage, and downstream AI edge devices. Nine of the top ten heavy-weighted holdings were electronics and communications stocks, with Zhongji Innolight topping the list at a market value of 260.5 billion yuan, while Kweichow Moutai and WuXi AppTec dropped out of the top ten. Facing the severe correction, some funds reduced positions early to avoid risks—E Fund Industry Opportunities A saw a drawdown of only 8.44%. Meanwhile, some consumer and healthcare funds were forced to cross over into tech, with E Fund Blue Chip Select and Invesco Great Wall Dingyi both significantly rotating into semiconductor and communications leaders. Institutions believe the rising concentration of holdings partly stems from market value inflation driven by share price gains. Future allocation should return to industry trend judgment and emphasize balance. Several fund managers caution about the volatility risks in high-expectation segments within tech.

The 2026 second-quarter reports of public funds show that well-known fund managers including Zhang Kun, Liu Yanchun, and Zhu Shaoxing collectively reduced their positions in core consumer assets such as baijiu during the second quarter, shifting their allocation focus toward the tech growth sector. In the top ten holdings of the E Fund Blue Chip Select managed by Zhang Kun, SMIC and Dongshan Precision were included for the first time. The concentration of holdings dropped from 90.5% at the end of the first quarter to 50.9%, and the overall position fell from 93% to 75%. The number of shares held in Wuliangye and Shanxi Xinghuacun Fenjiu declined by 70.68% and 70.91% respectively. The top ten holdings of the Invesco Great Wall Dingyi Mixed Fund managed by Liu Yanchun were completely replaced, with new additions including Konfoong Materials International and Zhongji Innolight. From the appointment of an additional manager on May 9 to June 30, the net value rose by 26.51%. The top ten holdings of the Fullgoal Tianhui Selected Growth Fund managed by Zhu Shaoxing underwent significant changes, with Zhongji Innolight and Zelgen Biopharmaceuticals entering for the first time. Kweichow Moutai dropped out of the top ten after being a major holding for 25 consecutive quarters, while the position in Sinocera was substantially reduced by 69.11%.