$Moutai(600519.SH)[stock Kweichow Moutai] Based on the non-cash-deduction basis (invested capital = shareholder equity), the ROIC for the past five years is as follows:

| Year | NOPAT | Average Shareholder Equity | ROIC |

| ------ |------| ------ |------|

| FY2021 | ¥52.83B | ¥182.34B | **29.0%** |

| FY2022 | ¥61.92B | ¥200.95B | **30.8%** |

| FY2023 | ¥74.13B | ¥214.30B | **34.6%** |

| FY2024 | ¥85.88B | ¥232.83B | **36.9%** |

| FY2025 | ¥82.42B | ¥247.99B | **33.2%** |

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**ROIC Breakdown Analysis**

Decomposing ROIC into NOPAT margin × Capital turnover ratio reveals the two engines driving ROIC:

| Year | NOPAT Margin | Capital Turnover Ratio | ROIC |

| ------ |------| ------ |------|

| FY2021 | 49.7% | 0.58x | 29.0% |

| FY2022 | 49.9% | 0.62x | 30.8% |

| FY2023 | 49.2% | 0.70x | 34.6% |

| FY2024 | 50.2% | 0.73x | 36.9% |

| FY2025 | 48.8% | 0.68x | 33.2% |

**Margin Dimension:** The NOPAT margin remained stable at 49-50% over the five years. Moutai's gross margin consistently exceeds 91%, the effective tax rate is around 25%, and expense ratios are diluted by economies of scale. The 'moat' of the margin shows almost no signs of erosion. The slight drop to 48.8% in FY2025 was mainly due to a 1.3% year-on-year revenue decline while fixed costs remained rigid.

**Turnover Dimension:** The capital turnover ratio climbed from 0.58x to 0.73x (FY2024), which was the core driver of ROIC improvement in recent years—retained earnings continuously increased equity, but revenue grew even faster, achieving 'leveraging more revenue with less incremental capital.' The turnover ratio fell back to 0.68x in FY2025, reflecting the first negative revenue growth.

**Key Variable for ROIC Inflection Point: Inventory**

The inventory/revenue ratio rose from 30% in FY2021 to 36.4% in FY2025 (inventory ¥61.43B). Moutai liquor has a production cycle of up to 5 years, and the accumulation of base liquor reserves year by year has increased the asset scale, widening the invested capital denominator. If future capacity expansion enters a release phase (base liquor gradually converted into finished product sales), inventory pressure will ease, and the turnover ratio is expected to recover; however, if continued pressure on the consumer end leads to high channel inventory, inventory may continue to drag down ROIC.

**Core Conclusion:** Moutai's 29-37% ROIC places it in the top tier of A-shares, and the absolute barrier of its profit margin remains solid. The first decline in ROIC in FY2025 is due to short-term pressure from the dual squeeze of inventory accumulation and slowing revenue growth. The subsequent trend depends on the progress of channel destocking and the pace of recovery in high-end liquor consumption.