CHINA PET FOODS(SZ:002891) BOHAI SECURITIES·2025-03-20 03:08Investment Rating - The report assigns an "Accumulate" rating to the company [2]. Core Viewpoints - The company, Zhongchong Co., Ltd., has been focused on the pet food sector for 27 years and has established itself as a leading enterprise in the industry. It operates 22 modern production bases globally and has a national-level R&D center [3][22]. - The pet food industry is experiencing favorable growth trends, with significant market expansion projected in both the U.S. and China. The U.S. pet food market is expected to exceed $66 billion in 2024, with a CAGR of 8.97% from 2024 to 2030. China's pet food market is projected to reach ¥158.5 billion in 2024, with a CAGR of 16.82% from 2016 to 2024 [4][42]. - The company has implemented a dual-driven development model focusing on both domestic and international sales, enhancing its competitive edge through global factory layouts and partnerships with international retailers [5][26]. Summary by Sections Company Overview - Zhongchong Co., Ltd. was established in 1998 and has focused on the pet food industry for 27 years. It has developed several proprietary brands and has a significant global presence, exporting to over 80 countries [3][22]. Financial Performance - The company reported a revenue of ¥3.748 billion in 2023, with a year-on-year growth of 15.4%. The projected revenue for 2024 is ¥4.381 billion, reflecting a growth rate of 16.9% [8]. - The net profit attributable to the parent company for the first three quarters of 2024 is expected to be between ¥360 million and ¥400 million, representing a year-on-year growth of 54.4% to 71.55% [3][33]. Market Trends - The global pet food market is projected to exceed $140 billion, with the U.S. and Europe being key markets. The CAGR for the U.S. pet food market from 2024 to 2030 is expected to be over 8% [4][42]. - In China, the pet food market is rapidly growing, with domestic brands gaining popularity and market share [4][42]. Strategic Initiatives - The company has adopted a focus strategy to streamline its brand management and enhance profitability through high-margin products and effective channel pricing control. This has resulted in a 23.91% year-on-year increase in domestic revenue for the first half of 2024 [5][40]. - The company is enhancing its global footprint by expanding its product offerings and strengthening its brand presence in international markets [5][26]. Profitability Outlook - The company expects to achieve significant profit growth in 2024, with a projected net profit of ¥360 million to ¥400 million, driven by increased sales and improved margins [3][33].