CHINA PET FOODS(SZ:002891) EBSCN·2025-08-06 10:48Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Insights - The company has shown significant revenue growth in its pet food segment, with a 24.3% year-on-year increase in revenue for the first half of 2025, reaching 2.43 billion yuan, and a 42.6% increase in net profit to 200 million yuan [5] - The company is expanding its overseas operations, with a notable increase in both domestic and international revenue, indicating a strong confidence in future growth [6][8] - The gross margin and net profit margin have improved, reflecting better product mix and cost management [7] Revenue Performance - In H1 2025, pet snacks generated 1.529 billion yuan (up 6.37%), pet staple food reached 783 million yuan (up 85.79%), and pet supplies and others brought in 119 million yuan (up 23.12%) [6] - Domestic revenue was 857 million yuan (up 38.89%) while international revenue was 1.575 billion yuan (up 17.61%) [6] Profitability Metrics - The gross margin for H1 2025 was 31.38%, an increase of 3.4 percentage points year-on-year [7] - The net profit margin for H1 2025 was 9.16%, reflecting a year-on-year increase of 1.25 percentage points [7] Global Expansion Strategy - The company is the only Chinese enterprise with pet snack factories in the US and Canada, which helps mitigate trade policy impacts [8] - The second production line in the Canadian factory is expected to be operational in the second half of 2025, with a second factory in the US projected for 2026 [8] Financial Forecasts - The company forecasts net profits of 461 million yuan, 569 million yuan, and 696 million yuan for 2025, 2026, and 2027 respectively, with corresponding EPS of 1.51 yuan, 1.87 yuan, and 2.29 yuan [8][10] - The projected P/E ratios for 2025, 2026, and 2027 are 38x, 31x, and 25x respectively [8][10]