Core Viewpoint - The pet industry is witnessing a significant merger as Yiyi Co., Ltd. plans to acquire Gao Ye Jia, a pet food company, to expand its business into the pet food sector, leveraging synergies in supply chain and marketing [1][9]. Company Overview - Yiyi Co., Ltd. has seen its stock price increase by 118.9% this year, closing at 34.85 yuan with a market capitalization of approximately 6.4 billion yuan as of October 13 [2]. - The company specializes in pet hygiene products and has established a strong supply chain and sales channel in this sector [1][5]. Acquisition Details - Yiyi Co. is in the process of planning a share issuance and cash payment to acquire Gao Ye Jia, which is currently in the discussion phase with no formal agreement signed yet [1]. - Gao Ye Jia, founded in 2020, focuses on pet food retail and has a registered capital of 1.2 million yuan, with its main product being probiotic cat food [3][5]. Market Context - The pet food market in China is projected to reach 166.8 billion yuan in 2024, with a year-on-year growth of 7.54%, indicating a robust growth trajectory for the sector [9][10]. - The overall pet economy is experiencing rapid growth, driven by changing consumer attitudes and an increase in pet ownership, with the urban pet population expected to reach 124 million by 2024 [9]. Strategic Positioning - Yiyi Co. has previously invested in the pet sector through an industrial fund, indicating a strategic focus on expanding its footprint in various pet-related segments, including cat litter and pet pharmaceuticals [7]. - The company aims to integrate resources and expand into essential pet products, preparing for future growth opportunities [7]. Industry Dynamics - The pet food segment is currently the largest in the pet economy, but the market remains fragmented with low concentration among leading brands [10]. - The entry of various listed companies into the pet sector suggests a search for new growth avenues amid stagnation in their primary businesses [10][11].