Petpal Tech.(SZ:300673) GUOTAI HAITONG SECURITIES·2025-11-19 09:15Investment Rating - The report maintains an "Accumulate" rating with a target price of 20.00 CNY [6][13]. Core Insights - Petty Co.'s self-owned pet food brand continues to grow, particularly solidifying its position in the dog snack segment. The company is actively expanding its overseas customer base, especially in Europe, which is expected to drive new order growth [2][13]. - The company achieved significant sales growth during the 2025 Double 11 shopping festival, with its self-owned brand experiencing high revenue growth, particularly in new staple foods and duck snacks [13]. - Petty Co. is focusing on the mid-to-high-end pet food market, leveraging its strong production capabilities, marketing skills, and leading R&D investments. The company aims to enhance its self-owned brand's market share through various strategies, including the introduction of high-end products from New Zealand [13]. Financial Summary - Total revenue is projected to decline by 18.5% in 2023, followed by a recovery with a 17.6% increase in 2024, and further growth in subsequent years, reaching 2,416 million CNY by 2027 [4][14]. - Net profit attributable to the parent company is expected to turn positive in 2024, with a significant increase of 1,742.8% to 182 million CNY, and further growth anticipated in the following years [4][14]. - The earnings per share (EPS) is forecasted to be 0.73 CNY in 2024, with a gradual increase to 0.97 CNY by 2027 [4][14]. Market Position and Valuation - The company is valued at a price-to-earnings (PE) ratio of 35x for 2025, which is slightly above the industry average, corresponding to the target price of 20 CNY [13]. - The current market capitalization stands at 4,506 million CNY, with a share price of 18.11 CNY [7][8]. Operational Highlights - The company has been actively expanding its overseas business, particularly in response to the challenges posed by U.S. tariff policies, with improvements noted in its order recovery from European clients [13]. - Petty Co. is expected to see a further increase in non-U.S. orders in its ODM business by 2026, indicating a positive outlook for international expansion [13].