CHINA PET FOODS(002891)2024-04-22 08:48Company Overview - The company's registered address is in Yantai, Shandong Province, with the postal code 264003[18] - The company's stock is listed on the Shenzhen Stock Exchange with the stock code 002891[18] - The company's legal representative is Hao Zhongli[18] - The company's website is www.wanpy.com.cn and the email address is 002891@wanpy.com.cn[18] - The company's main business is pet food, which provides essential nutrients for pets' growth and health[15] - The company has multiple subsidiaries and joint ventures, including Hao's Holdings, Inc. in the US and The Natural Pet Treat Company Limited in New Zealand[14] - The company operates over 1,000 product varieties across categories such as pet dry food, wet food, and snacks[64] - The company's core brands include "Wanpy," "ZEAL," and "TOPTREES," which have established a strong presence in the mid-to-high-end pet food market[71] - Wanpy, the company's longest-standing brand, is sold in 61 countries and regions, emphasizing fresh meat-based products[74] - ZEAL, acquired in 2018, offers premium New Zealand-sourced pet food and has expanded to over 30 countries and regions[75] - The company's brands, including Wanpy, ZEAL, and GREAT JACK'S®, are sold in 61 countries and regions globally[78] - The company's brands GREAT JACK'S® and ZEAL have entered 156 PetSmart stores in Canada, marking a new breakthrough in the North American market[78] - The company has a global production capacity across 5 countries and exports products to 73 countries and regions worldwide[78] - The company has 22 modern pet food production bases globally, including 14 in China and 8 overseas (2 under construction)[80] - The company has established a "Product Traceability System" and "Defective Product Recall System" to ensure product quality and safety[81] - The company and its subsidiaries have obtained 17 global authoritative certifications, including ISO9001, ISO22000, and HACCP[83] - The company's R&D center, established in 1998, is the most advanced in China's pet industry, with a total construction area exceeding 12,000 square meters[91] - The company's testing center, with an investment of over 15 million RMB, is the highest standard in China's pet industry and has passed CNAS certification[92] - The company's pet nutrition and health research institute covers 10,000 square meters and includes a testing base with over 300 experimental dogs and cats[93] - The company employs a dual production model: forecast-based production for its own brands and order-based production for OEM/ODM products[66] - Sales channels include online platforms (e.g., Tmall, JD.com), specialty pet stores, supermarkets, and special channels like breeding farms[69] - TOPTREES Leading® brand has launched innovative products such as "Low-Temperature Baked Fresh Meat Food," "99 Main Course Cans," and "Complete Main Course Cat Strips"[76] - The company has established factories in the US, New Zealand, Canada, and Cambodia, enhancing its global production and risk mitigation capabilities[100] - The company has developed over 20 independent technology projects in the past three years, with 3 provincial-level technology projects approved[97] - The company's R&D team consists of over 80 professionals, supported by international experts from the US, Germany, Canada, and New Zealand[95] - The company has established a wide network of subsidiaries and affiliated companies, covering areas such as brand management, e-commerce, and pet food production[193] - The company has a strong presence in both domestic and international markets, with subsidiaries in Cambodia and the United States, reflecting a global expansion strategy[194] - The company's leadership team includes experienced professionals with roles in multiple subsidiaries, such as Hao Chenlong, who serves as the general manager and legal representative of Shanghai Haoshi Pet Food Co., Ltd[194] Financial Performance - Revenue for 2023 reached 3.747 billion yuan, a 15.37% increase compared to 2022[23] - Net profit attributable to shareholders in 2023 was 233.16 million yuan, a 120.12% increase year-over-year[23] - Operating cash flow surged by 274.04% to 447.02 million yuan in 2023[23] - Basic earnings per share (EPS) increased by 121.49% to 0.7978 yuan in 2023[23] - Total assets grew by 14.32% to 4.39 billion yuan at the end of 2023[23] - Q4 2023 revenue was 1.035 billion yuan, the highest among all quarters[28] - Net profit in Q2 2023 was the highest at 80.51 million yuan[28] - The company's weighted average return on equity (ROE) improved to 10.88% in 2023, up from 5.56% in 2022[23] - Total revenue for 2023 reached 3.747 billion yuan, a 15.37% increase compared to 2022[106] - Revenue from pet food and supplies accounted for 96.43% of total revenue, reaching 3.614 billion yuan, a 14.97% increase year-over-year[106] - Pet snacks contributed 62.74% of total revenue, generating 2.351 billion yuan, a 9.81% increase compared to 2022[106] - Pet main food revenue surged by 60.23% to 576.76 million yuan, accounting for 15.39% of total revenue[106] - Domestic revenue grew by 20.40% to 1.086 billion yuan, representing 28.97% of total revenue[106] - Overseas revenue increased by 13.44% to 2.662 billion yuan, accounting for 71.03% of total revenue[106] - Direct sales revenue rose by 41.56% to 465.62 million yuan, representing 12.43% of total revenue[106] - OEM revenue increased by 26.13% to 2,153,414,918.40 yuan in 2023, compared to 1,590,634,363.84 yuan in 2022[108] - Direct sales revenue surged by 43.73% to 339,286,252.49 yuan in 2023, up from 190,932,128.46 yuan in 2022[108] - Pet food and supplies production volume grew by 9.80% to 85,250.39 tons in 2023, compared to 77,640.00 tons in 2022[108] - Inventory of pet food and supplies decreased by 12.03% to 12,077.60 tons in 2023, down from 13,729.88 tons in 2022[108] - Direct material costs for pet snacks decreased by 9.45% to 871,858,157.06 yuan in 2023, compared to 1,065,716,457.39 yuan in 2022[110] - Top 5 customers accounted for 45.26% of total sales, with the largest customer contributing 19.42% of total sales[113] - Top 5 suppliers accounted for 24.78% of total procurement, with the largest supplier contributing 14.56% of total procurement[113] - Sales expenses increased by 27.71% to 386,936,395.19 yuan in 2023, up from 302,973,777.70 yuan in 2022[114] - Financial expenses surged by 92.60% to 28,758,589.62 yuan in 2023, primarily due to increased interest expenses on convertible bonds[114] - R&D expenses increased by 10.48% to 47,909,593.71 yuan in 2023, compared to 43,363,196.96 yuan in 2022[114] - Operating cash flow surged by 274.04% to RMB 447.02 million due to increased sales and inventory management[118] - Investment cash inflow increased by 677.88% to RMB 1.40 billion, driven by financial product investments[118] - Construction in progress increased by 4.96% to RMB 468.13 million, reflecting higher capital expenditures[120] - Short-term borrowings rose by 6.30% to RMB 665.50 million, indicating increased financing activities[120] - The company's financial assets (excluding derivatives) reached RMB 389.08 million, with a fair value gain of RMB 2.08 million[122] - Other equity instrument investments decreased by RMB 4.43 million to RMB 68.68 million[122] - Total financial assets amounted to 457,756,900 yuan, with a breakdown of 173,283,000 yuan, 2,076,030 yuan, 4,433,183 yuan, 1,652,000 yuan, 1,365,000 yuan, and 168,900 yuan respectively[123] - The company's investment in the reporting period was 260,770,648 yuan, a 32.42% increase compared to the previous year's 196,922,627.92 yuan[125] - A significant equity investment of 2,000,000 yuan was made in a pet-related limited partnership in Chongqing[127] - The company invested 5,902,348 yuan in a pet food and supplies company, representing a 100% ownership stake[128] - Total investment in pet-related businesses and food companies reached 260,770,648 yuan, with a combined value of 3,510,641 yuan[128] - The company's financial liabilities stood at 10,490,000 yuan, with no changes reported[123] - The company completed the settlement of foreign exchange derivative products, concluding related business operations[123] - No significant changes in the measurement attributes of the company's main assets were reported during the period[124] - The company did not engage in any securities investments during the reporting period[129] - The company engaged in derivative investments for hedging purposes, with details provided in thousands of yuan[130] - The company's foreign exchange forward contracts amounted to RMB 25,482.89 thousand, with a fair value change loss of RMB 299.35 thousand during the reporting period[132] - The company's total foreign exchange derivative investments were RMB 25,482.89 thousand, with no speculative derivative investments[132][133] - The company's non-public issuance of shares in 2020 raised RMB 651,499,200, with a net amount of RMB 634,171,489.33 after deducting issuance costs[137] - The company's issuance of convertible bonds in 2022 raised RMB 769,045,900, with a net amount of RMB 754,956,277.37 after deducting issuance costs[138] - The company's total raised funds from non-public issuance and convertible bonds amounted to RMB 1,420,544,510, with RMB 1,389,127,800 used and RMB 51,260,090 remaining[135] - The company's foreign exchange derivative investments effectively hedged against exchange rate fluctuations, achieving the goal of risk-neutral management[132] - The company's independent directors unanimously approved the financial derivative transactions, stating they align with the company's long-term development and do not harm the interests of minority shareholders[132] - The company's foreign exchange derivative investments are funded by its own capital, not raised funds[132] - The company's foreign exchange derivative investments are primarily forward contracts, with strict internal approval and operational procedures to control risks[132] - The company's foreign exchange derivative investments are based on market quotes from external financial institutions for fair value determination[132] - The marketing center construction and marketing channel intelligent upgrade project has been fully invested with a total investment of 11,411 million yuan, achieving a 100% investment progress[140] - The annual production of 60,000 tons of pet dry food project reached 98.64% investment progress with a total investment of 23,700 million yuan, and is expected to be completed by October 31, 2023[140] - The annual production of 20,000 tons of pet wet food project in New Zealand achieved 100.90% investment progress with a total investment of 23,039 million yuan, and is expected to be completed by June 30, 2024[140] - The supplementary working capital project achieved 100.79% investment progress with a total investment of 16,408.73 million yuan[140] - The annual production of 60,000 tons of high-quality pet dry food project has a total investment of 22,960.71 million yuan, but is not yet completed[141] - The annual production of 40,000 tons of new pet wet food project has a total investment of 25,552.34 million yuan, but is not yet completed[141] - The annual production of 2,000 tons of freeze-dried pet food project achieved 79.97% investment progress with a total investment of 5,254.86 million yuan, and realized an income of 1,070.05 million yuan[141] - The flat warehouse intelligent three-dimensional transformation project achieved 71.34% investment progress with a total investment of 3,636.68 million yuan[141] - The supplementary working capital project achieved 100.04% investment progress with a total investment of 18,091.04 million yuan[141] - The total investment in committed projects is 142,054.59 million yuan, with a cumulative investment of 88,327.5 million yuan, achieving an overall investment progress of 62.18%[141] - The total investment for the "Annual 20,000 Tons of Pet Wet Food New Zealand Project" increased from RMB 230.39 million to RMB 278.61 million, with RMB 230.39 million funded by raised capital. The funding gap will be covered by the company's self-raised funds[142] - The company used RMB 38.4692 million of raised capital to replace self-raised funds previously invested in the project[142] - The company temporarily supplemented working capital with RMB 70 million of idle raised funds, all of which were returned to the raised capital account by July 24, 2023[142] - The company temporarily supplemented working capital with RMB 150 million of idle raised funds, of which RMB 4 million was not returned by December 31, 2023[142] - The company temporarily supplemented working capital with RMB 500 million of idle raised funds, all of which were returned to the raised capital account by July 24, 2023[142] - The company temporarily supplemented working capital with RMB 510 million of idle raised funds, of which RMB 504 million was not returned by December 31, 2023[143] - The company's subsidiary, Yantai Ailisi Zhongchong Food Co., Ltd., generated a net profit of RMB 33.2471 million[147] - The company's subsidiary, HAO's Holdings, Inc., generated a net profit of USD 54.8107 million[147] - The company's subsidiary, American Jerky Company LLC, generated a net profit of USD 149.5791 million[147] - The company's subsidiary, Aitao Pet Products (Cambodia) Co., Ltd., generated a net profit of USD 39.9896 million[148] - Total pre-tax compensation for executives in 2023 amounted to 1,062.46 million yuan[197] Market and Industry Trends - The pet industry is experiencing rapid growth, driven by increased demand for high-quality pet food and services[34] - Global pet industry size reached 350 billion by 2027[35] - US pet industry total spending reached 64.4 billion, veterinary care and products at 12.3 billion[36] - European pet market consumption totaled €53.6 billion in 2022, a 4.69% YoY increase, with 91 million households owning pets, representing a 46% penetration rate[39] - Southeast Asia pet market grew to 15 billion in 2020 to 5,000[45] - Aging population in China, with 15.4% aged 65 and above in 2023, is driving increased demand for pet companionship[46] - US pet industry is expected to continue steady growth, with total spending projected to increase significantly by 2030[36] - 87.5% of pet owners consider their pets as family members or friends, driving increased spending on pet products[47] - High-spending pet owners (monthly spending over 500 RMB on pet food) account for over 20% of the market[47] - The global pet food market is projected to reach 53.2 billion (40% share)[54] - U.S. cat food sales are expected to reach 36.7 billion, also a 9.4% increase[54] - China's pet food market reached 146.07 billion RMB in 2023, with a 5.85% YoY growth and a 6-year CAGR of 10.42%[58] - Pet food accounts for 52.3% of China's total pet market in 2023[58] - China's pet food exports to the U.S. declined in 2019 due to a 25% tariff increase, with 2021 exports totaling 7.886 billion RMB[59] - The proportion of cat ownership has surged since 2020, driving the growth of the "cat economy" and related industries[49] - 66% of U.S. households own at least one pet, with 86.9 million pet-owning households in 2022[54] - Pet owners in China are predominantly young, high