Overview - The electric mosquito repellent market in China is experiencing significant growth, driven by rising living standards, urbanization, and increased health awareness among consumers. The market size is projected to reach 5.502 billion yuan in 2024, with a year-on-year growth of 12.0% [1][11] - Electric mosquito repellent liquids account for approximately 79.35% of the market, while electric mosquito repellent tablets make up about 19.99% [11] Development Background - The increase in disposable income and consumer spending in China is contributing to the growing demand for electric mosquito repellents. In 2024, the per capita disposable income is expected to reach 41,314 yuan, with a growth of 5.3% [5] - There is a shift towards safer and more environmentally friendly products, with consumers preferring smoke-free and low-toxicity options. The rise in two-child families is also increasing the demand for child-specific mosquito repellent products [5] Industry Chain - The raw materials for electric mosquito repellents include active ingredients like pyrethroids and natural plant essential oils, as well as auxiliary materials such as solvents and preservatives. The downstream sales channels primarily consist of supermarkets, convenience stores, pharmacies, and e-commerce platforms [7][9] Current Market Situation - The offline sales channel still dominates the market, accounting for about 56%. However, online sales are rapidly increasing, projected to rise from 13.7% in 2024 to 44.2% [9] Competitive Landscape - The electric mosquito repellent industry in China features numerous participants, including both foreign brands like Raid and Ansu, and domestic brands such as Lanju, Chaowei, Rainbow, Jinlu, Runben, and Heimao. Domestic brands leverage their understanding of the local market and diverse product lines to capture significant market share [13][16] Company Analysis - Chaoyun Group, which owns several brands including Chaowei, reported a total revenue of 1.82 billion yuan in 2024, with a gross profit of 894 million yuan and a gross margin of 49.14% [16] - Runben Biotechnology Co., Ltd. generated a total revenue of 1.318 billion yuan in 2024, with its mosquito repellent product line contributing 439 million yuan, accounting for 33.34% of total revenue [18] Future Trends - The industry is expected to focus more on using natural plant extracts and reducing chemical additives in response to growing consumer environmental awareness. There is also a trend towards developing multifunctional electric mosquito repellent products that offer additional benefits such as mold prevention, odor removal, and air purification [20]

Core Viewpoint - The epidemic of Chikungunya fever in Guangdong Province remains at a high plateau, indicating a severe situation that requires attention [1]. Summary by Sections Epidemic Situation - As of July 22, 2025, Shunde District in Foshan City reported a total of 2,934 confirmed cases of Chikungunya fever, with a significant increase of 463 cases in just one day [4][5]. - The first report of the epidemic in Shunde was on July 15, 2025, with 478 confirmed cases, showing an increase of over 2,000 cases in just over a week [4]. - The World Health Organization (WHO) reported that 119 countries and regions have identified Chikungunya virus transmission, with approximately 5.5 million people at risk globally, potentially leading to widespread outbreaks [4][5]. Companies Involved in Prevention and Detection - **Runben Co., Ltd. (润本股份)**: A leading domestic company in mosquito repellent products, with a revenue of 440 million yuan in 2024, showing a year-on-year growth of 35.4% and a gross margin of 54.2% [7]. - **Rainbow Group (彩虹集团)**: A well-known pest control company in China, offering a full range of mosquito repellent products that play a crucial role in controlling Chikungunya fever [8]. - **Shanghai Jahwa (上海家化)**: The "Liushen" brand is the top brand in China for mosquito repellent flower water, holding significant brand influence in mosquito prevention and personal care [9]. - **Longyun Group (朗云集团)**: A Hong Kong-listed company that has maintained the number one market share in pest control products for ten consecutive years, with notable products performing well during the epidemic [10]. - **Kangzhi Pharmaceutical (康芝药业)**: Offers a full range of baby and child health protection products, including disinfectants and mosquito repellents, demonstrating expertise in child health protection [11]. - **Shuoshi Gene (硕世纪录物)**: Utilizes gene sequencing technology for Chikungunya fever testing, providing precise diagnostic support for epidemic prevention [12]. - **Da'an Gene (达安基因)**: Provides nucleic acid testing kits for Chikungunya virus, leveraging extensive experience in molecular diagnostics [13]. - **Huiyu Medical (会域医学)**: A leading medical testing institution in China, employing advanced technology for accurate diagnosis of Chikungunya fever [14]. - **Wansheng Biology (万学生物)**: Offers rapid testing solutions for Chikungunya virus, focusing on point-of-care testing [16]. - **Nuo Weisha (诺唯莎)**: Combines molecular design with various heat-start technologies to enhance detection efficiency for mosquito-borne viruses [17].

Core Insights - The pet shampoo market in China is experiencing significant growth, with the market size projected to increase from 2.4 billion yuan in 2020 to 11 billion yuan by 2024, reflecting a compound annual growth rate (CAGR) of 46.32% [1][16] - The industry is evolving from basic cleaning products to those that emphasize health care and emotional experience, with consumers increasingly prioritizing natural ingredients and functionally suitable products [1][16] - By 2025, the market size for pet shampoo in China is expected to reach 12 billion yuan, driven by rising pet ownership and enhanced consumer awareness regarding pet care [1][16] Industry Overview - Pet shampoo refers to cleaning products such as soaps and shower gels designed for pets, primarily used for deodorizing and preventing mites and fleas [4][16] - The market is segmented into general-purpose, functional, and medicinal types, catering to various pet needs [4] Industry Development History - The pet shampoo industry originated in the early 20th century, initially focusing on basic cleaning functions [6] - The 21st century has seen rapid development, with technological advancements leading to improved product formulations and increased brand competition [6] Industry Chain - The upstream of the pet shampoo industry includes raw materials like surfactants and various functional additives [8] - The midstream involves the manufacturing of pet shampoos, while the downstream encompasses sales through various channels including e-commerce and pet stores [8] Market Trends - The demand for customized products is rising, with brands likely to offer tailored solutions based on pet type and specific needs [24] - Functional products are becoming more specialized, with increasing demand for medicated shampoos and products catering to specific life stages of pets [25][26] - There is a growing preference for natural and organic ingredients, with consumers favoring products that are safe and environmentally friendly [27] Competitive Landscape - The global pet shampoo market features a mix of international and local brands, with competition intensifying as the pet economy grows [18] - Notable brands include ISB from Italy, Earthbath from the USA, and local brands like Xue Diao Liu Xiang and Yi Nuo, which are rapidly gaining market share in China [18][19] Key Companies - Chaoyun Group is a leading player in the pet care market, with a projected revenue of 127 million yuan from pet products in 2024, marking a 64.94% year-on-year increase [20] - Guangzhou Huiyou Biotechnology Co., Ltd. is a prominent company in the pet shampoo sector, known for its well-established brands and significant market presence [22]

Investment Rating - The industry investment rating is maintained as "Outperform the Market" [2][51]. Core Insights - The pet industry is experiencing a significant shift from "basic subsistence" consumption to "quality upgrade" consumption, with a notable 73% year-on-year increase in sales of pet products in live streaming sessions [4][11]. - The 618 shopping festival saw total sales in the pet food sector reach 7.5 billion yuan, indicating resilience in demand and structural upgrades within the industry [5][19]. - The rise of domestic brands is evident, with a substantial increase in the number of new products launched during the 618 festival, reflecting a strong response to consumer demand for quality and innovation [16][19]. Summary by Sections Live Streaming Sales - Sales of pet products in Li Jiaqi's live streaming room increased by 73% year-on-year, with essential items like staple food, snacks, and cat litter making up 92% of total sales [10][11]. - The new generation of pet owners (67% being post-90s and post-00s) is shifting their purchasing criteria from "having food" to "prioritizing ingredient lists," emphasizing the importance of quality and health in pet food [4][10]. 618 Shopping Festival Insights - The 2025 618 shopping festival saw pet food sales reach 7.5 billion yuan, showcasing the industry's robust demand and structural upgrades [5][19]. - The competition landscape is evolving, with platforms like Taobao and Tmall shifting focus from price wars to long-term value, promoting a healthier growth model based on brand loyalty and consumer engagement [5][19]. Offline Marketing Strategies - Brands are increasingly adopting experiential marketing strategies to enhance consumer engagement and drive premiumization, with examples including themed pop-up stores and integrated service models [6][32][41]. - The "4S model" by Chaoyun Group integrates various pet services, creating a comprehensive service ecosystem that enhances customer experience and brand loyalty [41]. Investment Recommendations - The report suggests focusing on domestic brands that are rapidly emerging in the pet economy, particularly those aligned with the dual themes of "domestic substitution" and "consumption upgrade." Recommended stocks include: Guibao Pet, Petty Co., Zhongchong Co., and Lusi Co., with a watch on Chaoyun Group [6].

Group 1 - The pet economy is experiencing rapid growth, with pets becoming important emotional companions and family members, leading to an expanding pet consumption market [1] - As of June 10, the Wind Pet Economy Concept Index increased by 1.68%, indicating positive market sentiment [1] - Analysts predict that new consumption habits and brand strength will continue to foster the emergence of new consumer brands in the pet industry [1] Group 2 - According to Huaxi Securities, the urban pet consumption market in China is expected to reach 300.2 billion yuan in 2024, representing a year-on-year growth of 7.5% [1] - The market is projected to grow to 478.7 billion yuan by 2030, with a compound annual growth rate (CAGR) of 6.9% from 2024 to 2030 [1] - Pet medical consumption is the fastest-growing segment at a growth rate of 13.9%, while the food sector holds the largest share at 52.8% [1] Group 3 - Galaxy Securities anticipates that the pet industry in China will exceed 400 billion yuan by 2027, driven by changes in consumer trends such as emotional economy and rational pet ownership [2] - CITIC Securities expects continued growth in the pet sector's performance by 2025, highlighting the resilience of demand in this niche market [2] - The domestic market is characterized by a "large industry, small leaders" phase, with increasing concentration among leading companies through product innovation and brand development [2] Group 4 - Chaoyun Group has expanded its store count to 68 as of May 13, 2025, indicating growth in its physical retail presence [3] - The company is expected to improve its profitability model for pet offline stores through single-store model development and fixed cost sharing [3] - Chaoyun Group has developed two proprietary brands, covering pet supplies and pet food, with significant growth in online channels due to accelerated product development and increased channel promotion [3]

Core Viewpoint - Chao Yun Group has shown strong performance in the stock market, with a year-to-date increase of over 63%, reaching a new high since 2022, indicating a recovery from previous fluctuations [4]. Company Performance - In 2024, Chao Yun Group achieved a revenue of 1.82 billion RMB, representing a year-on-year growth of 12.7%. The gross profit was 894.34 million RMB, with a gross margin of 49.1%, an increase of 4.6 percentage points from the previous year [4][5]. - The pet product segment experienced significant growth, generating revenue of 127 million RMB, a substantial increase of 64.5% year-on-year, with a gross margin of 54.7%, up by 11.5 percentage points [4][5]. Market Position and Trends - Chao Yun Group is recognized as a leading player in the home care industry in China, with well-known brands under its umbrella, including "Chao Wei," "Bei Bei Jian," and "Wei Wang" [4]. - The pet consumption market in urban China has shown a compound annual growth rate of 11.9% from 2015 to 2024, surpassing growth rates in the US and Japan, highlighting the robust potential of the pet economy [5]. - The recent e-commerce promotions have demonstrated strong sales in the pet sector, with significant increases in transactions for various pet brands [6]. Dividend and Investment Appeal - Chao Yun Group announced a final dividend of 0.0682 RMB per share, maintaining a high dividend payout ratio of approximately 80% for the previous year, which attracts institutional investors [6]. - The company has a solid cash position and a projected dividend rate of 81.5% for 2024, indicating strong shareholder returns [6].

Group 1 - As of May 26, a total of 88 stocks reached their 52-week highs, with Tianbao Energy (01671), China Nuclear International (02302), and Honghui Group (00183) leading the high rate at 141.60%, 93.92%, and 21.34% respectively [1] - Tianbao Energy closed at 0.700 and reached a peak of 1.510, marking a significant increase of 141.60% [1] - China Nuclear International closed at 4.090 with a highest price of 5.100, reflecting a rise of 93.92% [1] Group 2 - Other notable stocks that reached their 52-week highs include Century International (00959) with an increase of 18.64%, and Junjie Group Holdings (08188) with a rise of 17.95% [1] - The list also includes Haotian Financial Group (01260) with a 13.70% increase and Dechang Electric Holdings (00179) with a 10.96% rise [1] - The overall trend indicates a strong performance in the market, with multiple stocks achieving significant gains [1] Group 3 - The report also highlights stocks that reached their 52-week lows, with Sipai Health (00314) showing the largest decline at -11.65% [3] - Other stocks experiencing declines include Feitian Yundong (06610) at -9.05% and Hengrui Medicine (01276) at -4.81% [3] - The presence of stocks reaching both highs and lows suggests a volatile market environment [3]

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue reached RMB 1,820.1 million, representing a 12.7% increase from RMB 1,615.6 million in 2023[10]. - Gross profit for the same period was RMB 894.3 million, up 24.5% from RMB 718.3 million in 2023[10]. - The company reported a net profit of RMB 195.2 million for the fiscal year 2024, an increase of 12.9% compared to RMB 172.8 million in 2023[10]. - Revenue from home care products was RMB 1,633.8 million, an increase of 11.0% from the previous year[13]. - Revenue from pet stores and pet products surged to RMB 127.2 million, marking a 64.5% increase year-over-year[13]. - Online sales generated RMB 670.9 million, reflecting a 22.1% growth compared to the previous year[13]. - The company's total assets as of December 31, 2024, amounted to RMB 3,801.7 million, a slight decrease from RMB 3,836.1 million in 2023[11]. - The equity attributable to owners of the company increased to RMB 2,990.9 million in 2024, up from RMB 2,927.4 million in 2023[11]. - The company's revenue increased by 12.7% from RMB 1,615.6 million in 2023 to RMB 1,820.1 million in 2024, driven by successful market opportunities and rapid sales channel development[20]. - Profit before tax increased by 11.6% from RMB 217.3 million in 2023 to RMB 242.5 million in 2024[37]. - Net profit increased by 13.0% from RMB 172.8 million in 2023 to RMB 195.2 million in 2024, maintaining a net profit margin of 10.7%[39]. Revenue Breakdown - Home care products generated RMB 1,633.8 million in revenue, an increase of 11.0% from RMB 1,471.9 million in 2023, accounting for 89.8% of total revenue[21][22]. - Pet store and pet product revenue surged by 64.5% to RMB 127.2 million in 2024, up from RMB 77.3 million in 2023, representing 7.0% of total revenue[22]. - Online sales revenue rose by 22.1% to RMB 670.9 million, making up 36.9% of total revenue, while offline sales increased by 7.8% to RMB 1,149.2 million, accounting for 63.1%[23][24]. Gross Profit and Margins - Gross profit increased by 24.5% from RMB 718.3 million in 2023 to RMB 894.3 million in 2024, with an overall gross margin improvement from 44.5% to 49.1%[25]. - For the year ended December 31, 2024, the gross profit for home care products was RMB 804.3 million, with a gross margin increase from 45.0% in 2023 to 49.2% in 2024[29]. - The gross profit for pet stores and pet products was RMB 69.5 million, with a gross margin increase from 43.2% in 2023 to 54.7% in 2024[29]. - The gross profit for personal care products was RMB 22.5 million, with a gross margin increase from 40.3% in 2023 to 42.2% in 2024[29]. - Online channel gross profit reached RMB 374.6 million, with a gross margin increase from 47.8% in 2023 to 55.8% in 2024[31]. - Offline channel gross profit was RMB 519.7 million, with a gross margin increase from 42.7% in 2023 to 45.2% in 2024[31]. Strategic Plans and Investments - The company plans to continue focusing on product innovation and market expansion to meet consumer demands[6]. - The company plans to expand its high-end natural home care product line and enhance distribution coverage for home cleaning products in 2025[16]. - The company aims to accelerate mergers and acquisitions in personal care, cosmetics, and pet industries to identify quality projects with stable cash flow and clear profit models[19]. - Continuous investment in technology research and development is planned to maintain industry-leading capabilities and introduce differentiated products[16]. - The company is investing $30 million in R&D for new technologies aimed at enhancing product efficiency[5]. - Market expansion plans include entering three new international markets by Q4 2024[6]. Cost Management and Expenses - The management emphasized effective cost management measures to ensure stable growth in revenue and profits[12]. - Selling and distribution expenses increased by 26.8% from RMB 425.0 million in 2023 to RMB 538.8 million in 2024[33]. - Other income decreased by 6.9% from RMB 123.5 million in 2023 to RMB 115.0 million in 2024, accounting for 6.3% of total revenue[32]. Shareholder Returns and Dividends - The company is committed to a stable high dividend policy to maximize shareholder returns[19]. - The company reported a final dividend of RMB 0.0682 per share, equivalent to HKD 0.0739, for the fiscal year ending December 31, 2024, compared to RMB 0.0640 per share for the previous year[83]. - The total dividend for the year amounts to RMB 0.1220 per share, with a payout ratio of approximately 80.0%[83]. Governance and Compliance - The company has established a strong governance structure with independent directors providing oversight and strategic guidance[66]. - The company has established an ESG committee to oversee its environmental, social, and governance management[80]. - The company has complied with the environmental, social, and governance reporting guidelines as per the stock exchange requirements[165]. - The company is committed to high standards of corporate governance and has adopted the corporate governance code as its own[168]. - The board consists of three independent non-executive directors, accounting for one-third of the total board members[176]. Risk Management - The company identified key risks including reliance on brand reputation, intense industry competition, and changing consumer preferences[78]. Human Resources and Management - The company is committed to improving its human resources management to support its growth strategy[71]. - The management team emphasized the importance of sustainability initiatives, aiming for a 50% reduction in carbon footprint by 2025[10]. - The company encourages continuous professional development for directors to update their knowledge and skills[178]. Related Party Transactions - Independent non-executive directors confirm that the ongoing related party transactions are conducted on normal commercial terms and are in the overall interest of the company's shareholders[146]. - The company has entered into a new property service framework agreement with major shareholders, with annual transaction caps of approximately RMB 11.4 million, RMB 11.7 million, and RMB 12.1 million for the years ending December 31, 2024, 2025, and 2026, respectively[136].

Summary of Conference Call Company Overview - The conference call was held for 招云集团 (Zhaoyun Group) to discuss its 2024 performance and future outlook [1] Key Financial Performance - In 2024, Zhaoyun Group achieved a revenue of 1.82 billion RMB, representing a year-on-year growth of 13% [2] - The net profit reached 195 million RMB, also a 13% increase, with operating net profit at 120 million RMB, showing a significant growth of 50% [2] - The overall gross margin improved to 49.1%, up by 4.6 percentage points from the previous year [2] - The company maintained a cash reserve of over 2.7 billion RMB as of December 31, 2024 [2] - The dividend payout ratio for 2024 was 80%, with a mid-term payout ratio of 40% already completed [2][8] Business Segments Pet Business - The pet segment generated 127 million RMB in revenue, a substantial increase of 64.5% year-on-year [3] - The revenue from self-owned pet brands was 61.17 million RMB, growing by 7.4% [3] - The number of pet stores reached 60, contributing 65.98 million RMB, a remarkable growth of 224% [3] - The company has several flagship products with annual sales exceeding 100 million RMB [3] Home Care Products - The home care segment is undergoing upgrades, with a focus on enhancing product lines and market share [16] - The company aims to maintain its leading position in the mosquito repellent market, which has been the top seller for ten consecutive years [16] Growth Strategies - For 2025, the company plans to focus on several growth drivers: - Continuous upgrades and distribution of home care products [6] - Expansion in e-commerce channels, particularly on platforms like JD.com and Pinduoduo [6] - Development of new pet store formats and enhancing profitability per store [6][10] - The company anticipates maintaining a payout ratio of at least 80% in the coming years [8] Cost Management - The cost of raw materials and packaging decreased by 4.4% in 2024, with expectations for stable costs in 2025 [8] - The gross margin is projected to continue improving in 2025 [8] Market Position and Future Outlook - The company is committed to sustainable growth through product innovation and supply chain reforms [22] - The pet business is expected to contribute significantly to revenue, with projections of 1.8 to 1.9 billion RMB in 2025, reflecting a growth of 40% to 50% [15] - The company is also exploring acquisition opportunities to enhance its market position [20] Additional Insights - The company is focusing on optimizing the cost structure and improving the efficiency of various channels [7] - There is a strong emphasis on digital strategies and enhancing brand presence across multiple platforms [22] This summary encapsulates the key points discussed during the conference call, highlighting the financial performance, business segments, growth strategies, and future outlook of Zhaoyun Group.

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][10]. Core Views - The report highlights that the company achieved a year-on-year revenue growth of 12.6% to 1.82 billion RMB and a net profit growth of 13% to 195 million RMB in 2024, with a gross margin of 49.14%, an increase of 4.68 percentage points year-on-year [6][10]. - The company is expected to continue its multi-brand and multi-category channel development strategy, enhancing its competitive advantages through product innovation and channel optimization [10]. Revenue and Profit Growth - The home care product segment showed stable growth, with revenue reaching 1.634 billion RMB, a year-on-year increase of 11%, and a gross margin improvement from 45.0% in 2023 to 49.2% in 2024 [7]. - The pet product segment experienced rapid growth, with revenue of 127 million RMB, a year-on-year increase of 64.49%, and a gross margin increase from 43.2% to 54.7% [7]. Channel Development - Online sales channels achieved revenue of 671 million RMB, a year-on-year increase of 22.1%, with gross margins rising from 47.8% to 55.8% [7]. - Offline sales channels generated 1.149 billion RMB in revenue, a year-on-year increase of 7.8%, with gross margins improving from 42.7% to 45.2% [7]. Research and Innovation - The company has a strong focus on research and development, with over 172 patents by the end of 2024, and notable product performance in various categories [7][10]. - Key products such as the "Super Mosquito Repellent Green Bottle" and "Pet Food Fresh Package" have seen significant sales growth, indicating strong market demand [7]. Financial Projections - The company is projected to achieve revenues of 2.006 billion RMB, 2.206 billion RMB, and 2.420 billion RMB for the years 2025, 2026, and 2027 respectively, with corresponding net profits of 225 million RMB, 247 million RMB, and 271 million RMB [10][11]. - The expected price-to-earnings (P/E) ratios for the next three years are 12, 11, and 10 respectively, indicating a favorable valuation outlook [10].