Kweichow Moutai (600519.SH): Direct sales revenue growth accelerated in 3Q26; maintain Buy and raise TP to CNY1,741.60, implying 17.7% upside

Kweichow Moutai released its 3Q26 results: in 9M26, revenue rose 2.0% y-y to CNY130.97bn, while net profit edged down 0.3% y-y to CNY64.47bn. In 3Q26, revenue grew 3.1% y-y to CNY40.27bn, while net profit increased 3.8% y-y to CNY19.95bn. The 9M26 results were broadly in line with our previous expectations. Direct sales continued to gain traction, with 9M26 revenue up 32.8% y-y to CNY73.77bn, while wholesale distribution revenue fell 21.6% y-y to CNY57.12bn. In 3Q26, direct sales revenue grew 40.3% y-y to CNY21.81bn, while wholesale distribution revenue declined 21.6% y-y to CNY18.42bn. In 9M26, revenue generated through the iMoutai platform grew 361.4% y-y to CNY58.56bn, accounting for 44.7% of core business revenue, up 34.9pp y-y and slightly above 44.4% in 1H26. Gross margin declined 1.6pp y-y to 89.6% in 3Q26, while the 9M26 net profit margin declined 1.1pp y-y to 49.2%. We maintain our 2026-28F revenue and net profit forecasts and roll our valuation base forward to 2027, applying