CHINA PET FOODS(SZ:002891) Haitong Securities International·2025-08-06 13:43Investment Rating - The report assigns an "Outperform" rating to Yantai China Pet Foods, indicating an expected total return over the next 12-18 months that exceeds the relevant market benchmark by more than 10% [19]. Core Insights - The company's net profit attributable to the parent company for 1H25 was RMB 203 million, a year-on-year increase of 42.6%, driven by strong growth in proprietary brands and overseas factories [2][9]. - Total operating revenue for 1H25 reached RMB 2.43 billion, reflecting a 24.3% year-on-year increase, with a gross profit margin of 31.4%, up 3.4 percentage points from the previous year [2][9]. - The company has raised its guidance for certain business lines, increasing the domestic revenue growth target to 35% and the brand export target from RMB 400 million to RMB 450 million [3][10]. Summary by Sections Financial Performance - In 1H25, the company achieved total operating revenue of RMB 2.43 billion, up 24.3% year-on-year, and net profit attributable to the parent company of RMB 203 million, up 42.6% year-on-year [2][9]. - The gross profit margin for 1H25 was 31.4%, with domestic and overseas gross profit margins at 37.7% and 27.9%, respectively [2][9]. - The selling and administrative expense ratios increased to 12.2% and 8.0%, respectively, due to higher marketing investments [2][9]. Business Segments - Revenue from pet food and supplies reached RMB 2.34 billion, with pet treats, staple food, and supplies growing by 6.4%, 86%, and 11% year-on-year, respectively [3][10]. - Domestic business revenue was RMB 857 million, accounting for 35.3% of total revenue, while overseas business revenue was RMB 1.575 billion, accounting for 64.8% of total revenue [3][10]. Strategic Developments - The establishment of a new factory in Mexico aims to enhance overseas business development, with half of its capacity planned for the U.S. market [4][11]. - The company is actively engaging in diverse marketing activities and new product launches to support the growth of its proprietary brands [5][12].