CHINA PET FOODS(SZ:002891) SINOLINK SECURITIES·2025-08-05 15:16Investment Rating - The report maintains a "Buy" rating for the company, with expected net profits for 2025-2027 projected at 4.6 billion, 5.8 billion, and 7.1 billion RMB, representing growth rates of +18%, +26%, and +23% respectively [5]. Core Insights - The company reported a revenue of 2.432 billion RMB for H1 2025, a year-on-year increase of +24.32%, and a net profit attributable to shareholders of 203 million RMB, up +42.56% year-on-year, indicating performance in line with expectations [2]. - The growth in staple food products is accelerating, with significant contributions from the company's brands, particularly in overseas markets, benefiting from strategic expansions and a focus on high-quality production [3][4]. - The gross margin improved to 31.38% in H1 2025, an increase of 3.0 percentage points, driven by enhanced overseas production capabilities and increased brand investments [4]. Summary by Sections Financial Performance - H1 2025 revenue breakdown shows overseas and domestic revenues at 1.57 billion and 860 million RMB respectively, with year-on-year growth of +17.6% and +38.9% [3]. - The company’s gross profit for H1 2025 was 985 million RMB, with a gross margin of 26.3% [12]. Product Categories - Revenue from pet snacks and staple foods in H1 2025 was 1.529 billion and 784 million RMB, reflecting year-on-year growth of +6.4% and +85.8% respectively, highlighting a strategic shift towards staple food products [3][4]. Cost Structure - The report indicates that the sales, management, and R&D expenses as a percentage of revenue were 12.2%, 6.1%, and 0.1% respectively, with slight increases compared to the previous year [4]. Future Projections - The company is expected to see continued growth in revenue and net profit, with projections indicating a revenue increase to 5.427 billion RMB by 2025, representing a growth rate of 21.55% [10].