Core Viewpoint - Xiamen Jihong Technology Co., Ltd. (Jihong Co., 002803.SZ) is set to go public on the Hong Kong Stock Exchange, leveraging its "data + technology" model to drive growth in cross-border e-commerce and packaging services, with projected revenues exceeding 5 billion RMB from 2022 to 2024 and a peak net profit of 332 million RMB [1][2][6]. Group 1: Company Overview - Jihong Co. focuses on ToC precision marketing cross-border social e-commerce and ToB comprehensive marketing design packaging services, establishing a differentiated competitive edge through AI technology [2][6]. - The company has formed deep partnerships with leading fast-moving consumer goods (FMCG) brands such as Yili and Luckin Coffee, and has achieved a leading position in emerging markets like Southeast Asia and the Middle East [2][6][15]. - Jihong Co. ranks second among B2C export e-commerce companies in China with a market share of 1.3% and leads in the paper-based FMCG sales packaging sector with a market share of 1.2% [8][12]. Group 2: Financial Performance - The company's revenue for 2022, 2023, and 2024 is projected to be 5.376 billion RMB, 6.695 billion RMB, and 5.529 billion RMB, respectively, with corresponding net profits of 172 million RMB, 332 million RMB, and 184 million RMB [6][15]. - In Q1 2025, Jihong Co. reported a revenue of 1.477 billion RMB, an increase of 11.55% year-on-year, and a net profit of 59 million RMB, up 38.21% year-on-year [15][17]. Group 3: Market Dynamics - The paper-based sales packaging industry is experiencing rapid growth, with the market size expected to reach 613.1 billion RMB by 2024 [9][10]. - The market for paper-based FMCG sales packaging has grown from 145.6 billion RMB in 2020 to an estimated 170.3 billion RMB in 2024, with projections to reach 222.7 billion RMB by 2029 [10][12]. - Environmental policies are enhancing competitive advantages, as the Chinese government promotes the use of eco-friendly alternatives in packaging [12][14]. Group 4: Strategic Initiatives - Jihong Co. plans to invest in technology iteration and overseas capacity expansion through its IPO proceeds, focusing on self-owned brands and eco-friendly packaging to expand its global footprint [1][4][18]. - The company has established a strategic partnership with VENU STRADING FZCO to build a sales network in the Middle East and Africa, focusing on packaging production and trade platforms [16]. - Jihong Co. aims to enhance its market competitiveness through the development of self-owned brands, leveraging its accumulated marketing data and technological advantages [15][17].

Group 1: Financial Performance - In 2024, the company's revenue reached 1.31 billion CNY, a year-on-year increase of 32.16%, while net profit attributable to shareholders was 164 million CNY, up 30.24% [2] - The overseas revenue amounted to 1.124 billion CNY, reflecting a 27.15% increase compared to the previous year [2] - Domestic revenue for 2024 was 186 million CNY, showing a significant growth of 73.38% [3] Group 2: Growth Drivers - The global pet industry is experiencing stable growth, benefiting from the company's OEM/ODM model and strong partnerships with international retailers like Petco and Walmart [2] - The company has enhanced its overseas production capabilities, with facilities in Cambodia and Bangladesh, improving resilience against disruptions [3] - Continuous product innovation and expansion of product categories, including pet leashes, snacks, and toys, have contributed to steady growth [3] Group 3: Market Trends and Future Outlook - The pet food segment generated 607 million CNY in revenue for 2024, growing at approximately 28.17%, accounting for 46.31% of total revenue [5] - The Chinese pet market is projected to reach 300.2 billion CNY in 2024, with a growth rate of 7.5% compared to 2023 [8] - By 2027, the urban pet market is expected to expand to 404.2 billion CNY, with dog and cat markets reaching 189.1 billion CNY and 215.1 billion CNY, respectively [8] Group 4: Challenges and Strategic Adjustments - The company's cost of goods sold increased by 50% in Q1 2025, outpacing revenue growth of 36%, primarily due to expanded domestic operations [3] - The net profit for Q1 2025 was 25.37 million CNY, a decrease of 30.57% year-on-year, attributed to increased sales expenses from domestic market expansion [8] - The company is closely monitoring international trade policies and adjusting its strategies accordingly, while also focusing on promoting its own brands domestically [6]

Group 1: Company Overview and Financial Performance - Wenzhou Yuanfei Pet Toy Products Co., Ltd. reported a revenue of 1.31 billion CNY in 2024, representing a year-on-year growth of 32.16% [4] - In Q1 2025, the company achieved a revenue of 335 million CNY, with a year-on-year increase of 36.3% [4] - The overseas revenue reached 1.124 billion CNY, marking a 27.15% increase compared to the previous year [4] Group 2: Product Categories and Profitability - Pet leashes generated a revenue of 455,985 CNY with a gross margin of 23.20%, showing a slight increase of 0.56% year-on-year [4] - Pet snacks achieved a revenue of 606,609 CNY and a gross margin of 28.17%, reflecting an 8% increase year-on-year [4] - Other pet products reported a revenue of 196,419 CNY with a gross margin of 60.18%, indicating a decrease of 1.89% year-on-year [4] Group 3: Strategic Initiatives and Market Expansion - The company is expanding its overseas production capacity with new factories planned in Cambodia and Bangladesh [3][5] - It has established a domestic sales channel and is gradually launching its own brands, including PIKAPOO, Halawei, and Legend Elf, targeting different consumer needs [7][8] - The company has built a domestic team of over 100 people to support brand operations following the acquisition of Hangzhou Feiyuan Network Technology Co., Ltd. [7] Group 4: Market Trends and Competitive Position - The global pet industry is experiencing stable growth, benefiting the company through its OEM/ODM model with international retail chains [5] - The diversification of product categories and continuous innovation have strengthened the company's competitive edge in the market [6][7]

Financial Performance - In 2024, the company's revenue reached 1.31 billion CNY, a year-on-year increase of 32.16%, with a net profit attributable to shareholders of 164 million CNY, up 30.24% [4] - For 2025, projected revenue is 335 million CNY, reflecting a growth of 36.3%, while net profit is expected to be 25.37 million CNY, a decrease of 30.57% [4] Market Strategy - The company implements a dual-drive strategy, promoting simultaneous growth in both domestic and international markets, resulting in a 27.15% increase in overseas revenue (1.12 billion CNY) and a 73.38% increase in domestic revenue (186 million CNY) in 2024 [4] - The company has established two factories in Cambodia, focusing on pet food and pet supplies, which helps mitigate the impact of U.S. tariffs on its business [5] Production Efficiency - Cambodia's geographical advantages allow for effective control of raw material costs, and the availability of a skilled labor force helps reduce labor costs [6] - The company has been enhancing employee training in its Cambodian factories since 2020, leading to improved production efficiency [6] Brand Development - The company launched three proprietary brands in 2024: PIKAPOO, Halawei, and Legend Elf, each targeting different consumer needs and market segments [7] - PIKAPOO focuses on high-cost performance products, Halawei emphasizes functional pet care, and Legend Elf targets high-end nutrition, aiming to increase brand influence and domestic market sales [7]

Financial Data and Key Metrics Changes - Net sales declined by 9.4% in Q4 and 7.2% for the year, with comparable sales decreasing by 6.7% in Q4 and 6.5% for the year [24][30] - Gross margin in Q4 was 32.9%, an increase of 49 basis points, while for the full fiscal year 2024, gross margin increased by 50 basis points to 37.2% [30][31] - Adjusted net income for Q4 was $106 million, with adjusted earnings per diluted share at $0.95, while for the year, adjusted net income was $167 million and adjusted earnings per diluted share was $1.50 [33] Business Line Data and Key Metrics Changes - Sephora continued to be a strong sales driver with comparable beauty sales increasing by 13%, an acceleration from Q3 [27] - The accessories business, excluding Sephora, had flat comparable sales for the quarter, driven by strong performance in fashion and bridge jewelry [28] - The apparel business saw notable comparable sales improvement as proprietary brand inventory was rebuilt throughout the quarter [29] Market Data and Key Metrics Changes - Digital sales experienced a decline of 13.4% in Q4 and 8.7% for the year, primarily due to softness in the home category and online inventory suppression issues [26] - Store comparable sales declined by 3.1% in Q4 and were down 5.6% for the year, although store sales benefited from strong average transaction value [24][25] Company Strategy and Development Direction - The company aims to offer a curated, balanced assortment that fulfills needs across all customers, reestablish itself as a leader in value and quality, and enhance the omnichannel platform for a frictionless shopping experience [11][12][18] - The focus will be on proprietary brands that resonate with core loyal customers, while also introducing new products to drive productivity [15][16] - The company plans to simplify promotions and clarify value messaging to improve the shopping experience [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the turnaround will take time, with actions in 2025 marking the initial phase of improvement [11][22] - The macro environment presents challenges, particularly for customers with lower income levels, who are seeking value [60][61] - Management is optimistic about the company's potential, citing a strong foundation and a dedicated associate base focused on customer service [21][44] Other Important Information - The company announced the closure of 27 underperforming stores and one e-commerce fulfillment center, resulting in a one-time charge of $76 million [33] - Capital expenditures for 2025 are expected to be in the range of $400 million to $425 million, focusing on Sephora rollout and omnichannel enhancements [39] Q&A Session Summary Question: Assessment of merchandising strategy and confidence in returning to growth - Management sees significant opportunity in product offerings, value, and quality, with a loyal customer base that can be better served [42][43] Question: Implications for margins with quality elevation of private brands - The focus will be on balancing proprietary and national brands, with an emphasis on improving inventory allocation and promotional strategies [48][49] Question: Store base evaluation and merchandise assortment mix - The majority of stores are profitable, and management is focused on reallocating space effectively to enhance customer experience [54][55] Question: Consumer health level in guidance - The guidance reflects uncertainty in the macro environment and the time needed for necessary changes [100] Question: Initiatives prioritization and free cash flow modeling - Short-term tactical moves are prioritized, with longer-term strategies still in development [68][71]