Rough Calculation of Long-term Yield of Kweichow Moutai

Considering that the compound growth rate of net profit in the next ten years will be 5%, 10%, 15%, and 20%, respectively, the PE will be 10, 15, 20, 25, 30, 35, and 40 times after ten years (currently calculated at 38 times PE). ), and the long-term compound annualized rate of return of Kweichow Moutai is roughly as shown in the following table (the market value of the last column is calculated at 40 times PE).

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1. My psychological expectation is that the compound growth rate of net profit in the next ten years is 15%, and the PE is 25 times, and the annualized rate is about 10.28%. According to the most optimistic situation in the table, the compound growth rate of net profit in the next ten years is 20%, and the PE is 40 times. I’m a little skeptical about this).

2. It can be seen from the table that it is the net profit growth rate (fundamentals) that determines the long-term yield of Moutai in the future. The impact of changes in valuation is secondary, and the certainty of Kweichow Moutai is quite guaranteed, which may is a key factor to consider when making an investment decision.

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