Core Insights - The company reported a revenue of 4.737 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 29.0%, with a net profit of 513 million yuan, up 9.1% year-on-year [1] - In Q3 2025, the revenue was 1.517 billion yuan, showing a year-on-year growth of 21.9%, while the net profit decreased by 16.7% to 135 million yuan [1] Business Analysis - The high-end cat food brand, Friega, continues to experience rapid growth, while the growth rate of the main brand, Maifudi, has slowed but remains above the industry average. The pet food industry sales increased by 7.3% year-on-year in Q3 2025, with Maifudi and Friega's sales growing by 8.1% and 75.0% respectively, both outperforming the industry average [2] - The gross margin for the first three quarters and Q3 2025 was 42.83% and 42.92% respectively, reflecting a year-on-year increase of 0.9 and 1.1 percentage points, primarily due to accelerated product structure upgrades. However, the Q3 gross margin decreased by 0.9 percentage points quarter-on-quarter, likely due to the impact of tariffs on export business [2] - The company launched new high-end products in 2024, including the zero-pressure milk series and high-fresh meat natural grain series, which have been well-received by consumers, driving growth. Additionally, the introduction of the ultra-premium dog food brand Wangzhenchun fills a gap in the domestic ultra-premium dog food market, further enhancing the brand matrix [2] - Increased competition in the domestic market has led to a rise in sales expense ratio, impacting profitability. The sales and management & R&D expense ratios for the first three quarters of 2025 increased by 2.9 and decreased by 0.3 percentage points to 21.8% and 7.2% respectively. In Q3 2025, these ratios were 23.3% and 7.7%, showing year-on-year increases of 4.6 and 0.1 percentage points [2] Profitability Metrics - The net profit margin for the first three quarters of 2025 was 10.8%, down 2.0 percentage points year-on-year, while Q3's net profit margin was 8.9%, down 4.2 percentage points year-on-year. The decline in net profit margin is primarily attributed to the increase in sales expense ratio, which has offset the improvements in gross margin [3] Market Performance - The company performed well during the Double Eleven shopping festival, with high-end products driving product structure upgrades. In the first four hours of the event, Friega and Maifudi ranked second and fifth respectively in the Tmall pet brand sales list, with Friega and Maifudi leading in the cat and dog staple food categories [4] - The improved rankings in the sales list are expected to enhance product structure optimization and increase average gross margin [4] Earnings Forecast and Valuation - The company is expected to continue its growth momentum as a leading domestic pet food brand, with projected net profits of 710 million, 890 million, and 1.12 billion yuan for 2025-2027, representing year-on-year growth of 14%, 25%, and 25% respectively. The current stock price corresponds to P/E ratios of 48, 39, and 31 times for the respective years [5]