Core Viewpoint - The brand Fupai Ejiao has announced a comprehensive brand image upgrade, reflecting its respect for traditional craftsmanship and cultural heritage while also showcasing its strategic vision for future development [1][3]. Brand History and Heritage - Fupai Ejiao has a rich history dating back to 1691, with significant milestones including royal endorsements and awards, establishing itself as a benchmark brand in the Ejiao industry [3]. - The brand adheres to the principle of "thick virtue brings fortune," emphasizing the importance of traditional craftsmanship and high-quality ingredients [3]. Brand Image and Aesthetics - The new brand logo retains core elements while integrating modern design language, aiming to connect health and warmth in contemporary life [7][9]. - The visual identity emphasizes a square shape with rounded corners, using red and gold to reflect the brand's heritage and vitality [9][10]. - The design incorporates royal quality and historical significance, showcasing a balance of cultural depth and modern appeal [10][13]. Product Packaging Innovation - The packaging focuses on green and eco-friendly materials, utilizing honeycomb cardboard to enhance sustainability and product protection [15][20]. - The design draws inspiration from imperial calligraphy, encapsulating the essence of Ejiao culture while improving structural strength by 40% for better transportation safety [20]. Retail Experience Enhancement - Fupai Ejiao's new retail concept is positioned as a "new-style seasonal health specialty store," integrating personalized health solutions with a focus on seasonal wellness [21]. - The store layout includes various zones to meet diverse consumer needs, enhancing the immersive shopping experience [23]. Brand IP Development - The launch of the original brand IP "Fulu Beast" symbolizes cultural heritage and brand craftsmanship, designed to appeal to younger demographics [25][30]. - The character will be utilized across product packaging, store visuals, and various creative content, expanding its reach and engagement with new consumer groups [30]. Commitment to Quality and Tradition - Fupai Ejiao emphasizes its commitment to genuine heritage, quality ingredients, and craftsmanship, aiming to reshape modern perceptions of traditional nourishment [32].

Core Insights - The incident involving "boiled donkey hide" in 2018 led to a significant downturn for the leading company in the donkey-hide gelatin industry, Dong'e Ejiao, which faced losses the following year [1] - After the acquisition by China Resources, Dong'e Ejiao shifted its business strategy, successfully reversing its losses and gradually returning to a growth trajectory [1] - The past price increase model for donkey-hide gelatin was unsustainable, and the company has since experienced a rebirth following this crisis [1] Industry Overview - The pharmaceutical industry is considered a valuable sector for deep exploration, with leading companies in the three major A-share pharmaceutical segments (traditional Chinese medicine, chemical pharmaceuticals, and biological products) achieving gross margins exceeding 70%, with some even surpassing 90% [1] - Dong'e Ejiao reported a gross margin of 73.13% in the first half of this year, indicating that the donkey-hide gelatin industry remains a promising sector, which is a key reason why northbound funds have become the third-largest shareholder of Dong'e Ejiao [1] Strategic Reflections - The past reliance on price increases allowed Dong'e Ejiao to achieve "value recovery," benefiting the entire industry chain for over a decade; however, the sustainability of such a model is questionable [1] - The company must innovate internally to adapt to changing market conditions, as failure to do so may lead to external disruptions that are not unexpected [1]

Industry Overview - The number of registered companies in China's Ejiao industry has shown a growth trend, with over 600 companies registered as of June 2025, and nearly 200 new companies added between 2016 and 2020 [1][3] - The production of Ejiao blocks in China is projected to increase, with an estimated production of 4,379 tons in 2024 [3] Supply Situation - The sales-to-production ratio of Dong'e Ejiao has been declining over the past three years, dropping from 100.9% in 2022 to 97.9% in 2024, indicating increased inventory pressure [5] Demand Scale - The market size of the Ejiao industry in China is expected to reach approximately 29.1 billion yuan in 2024, driven by rising disposable income and increased health awareness among consumers [7] Price Trends - The prices of Ejiao products from major brands like Dong'e Ejiao and Fupai Ejiao have remained stable, with Dong'e Ejiao priced at 2,700 yuan per kilogram and Fupai Ejiao at approximately 1,260 yuan per kilogram [9]

Core Insights - The Chinese ejiao industry has experienced significant fluctuations in retail terminal sales, with a notable increase in 2023 followed by a projected decline in 2024 [3][5] - Major ejiao manufacturers are rapidly expanding their online sales channels to adapt to the growing e-commerce landscape and changing consumer behaviors [6][9] Sales Performance - In 2023, the retail terminal sales of ejiao reached approximately 6.5 billion yuan, marking an 11.8% year-on-year increase, the highest growth rate in six years [3] - The retail terminal sales of compound ejiao paste in 2023 were 2.017 billion yuan, reflecting a 41.3% year-on-year growth, but are expected to decline to 1.7 billion yuan in 2024 [5] Sales Channels - The primary sales channels for ejiao products include hospitals, supermarkets, retail pharmacies, direct specialty stores, and online e-commerce platforms [1] - East Ejiao has focused on building and maintaining online sales channels, achieving over 30% year-on-year growth in sales GMV for its products in the first half of 2024 [1][9] - Other manufacturers, such as Fupai Ejiao, are also leveraging online sales strategies, including live streaming and community marketing, to enhance their market presence [9] Manufacturer Strategies - East Ejiao emphasizes a multi-channel approach, integrating online and offline sales to reach a broader consumer base, particularly younger demographics [9] - Fupai Ejiao has developed a comprehensive online and offline strategy, including partnerships with live streaming influencers and community marketing initiatives [9] - Tongrentang has expanded its offline presence with 1,270 stores across 190 cities and is actively engaging in online platforms like Tmall and JD Health [10] Market Outlook - The overall outlook for the ejiao market indicates a challenging environment in 2024, with expected declines in sales due to weaker consumer demand and a sluggish retail pharmacy sector [3][5]

Core Insights - The article highlights the significance of Shandong Province as the primary region for the Chinese ejiao (donkey-hide gelatin) industry, with a concentration of registered companies and production capacity [1][11]. Industry Overview - The ejiao industry in China is predominantly located in Shandong Province, with major companies also found in Guangdong, Henan, Hebei, and Jilin [1]. - Shandong Province is home to over 200 ejiao production enterprises, with a duopoly market structure led by Dong'e Ejiao and Fupai Ejiao, while other brands compete in the market [7][11]. Production and Supply - The total number of donkeys in Shandong Province is projected to decline to 21,000 by 2024, with the province accounting for only 1.83% of the national donkey population as of the end of 2023 [3][4]. - The donkey breeding regions in Shandong are concentrated in seven cities, which account for over 95% of the province's donkey population [4]. Development Plans - The "Shandong Province Donkey Industry High-Quality Development Plan (2024-2035)" aims to double the donkey population by 2030 and establish 3-5 leading ejiao production enterprises, with a target of over 100 billion yuan in industry output value by 2035 [4][12]. - Dong'e County is recognized as a key area for ejiao production, contributing over 60% of the national ejiao output [12]. Key Companies - Dong'e Ejiao Co., Ltd. is a major player in the ejiao market, established in 1952 and known for its high-quality products and significant market presence [10]. - Fupai Ejiao Co., Ltd. has a long history dating back to 1950 and has developed into a comprehensive health industry group [10]. - Other notable companies include Jinan Guben Tang Biotechnology Co., Ltd., Jinan Qian Nian Biological Engineering Co., Ltd., and Shandong Hongjitang Pharmaceutical Group Co., Ltd., each contributing to the diverse ejiao product offerings [10].

Core Viewpoint - The article discusses the current state of the liquor industry, particularly the challenges faced by second and third-tier liquor companies, suggesting that the industry is entering a phase of performance decline, which may lead to significant price drops and a reevaluation of price-to-earnings (PE) ratios [2][3]. Group 1: Industry Performance - The liquor industry is experiencing a significant downturn, with many companies reporting poor mid-year results, leading to speculation about further declines in performance and valuation [2]. - Historical examples indicate that the anticipated phases of "killing performance" and "killing logic" may not occur as expected, as past performance declines have often already reflected negative market sentiment before official poor results are announced [3]. - The article highlights that the market often reacts prematurely to negative news, as seen in the cases of Yili and Dong'e Ejiao, where stock prices did not follow the predicted patterns of further declines after performance issues were revealed [3]. Group 2: Market Perception and Misconceptions - There is a tendency among investors to apply lessons from the real estate sector to the liquor industry, leading to an overly pessimistic outlook on liquor stocks [5]. - The liquor industry operates on a low-leverage model, contrasting with the high-leverage nature of real estate, which can lead to more severe consequences during downturns [5]. - The financial characteristics of real estate differ significantly from those of consumer stocks, as demand for liquor does not vanish in the same way that demand for real estate can during economic downturns [5][6]. Group 3: Supply and Demand Dynamics - The article posits that the liquor market will eventually reach a balance between supply and demand, as poor sales will force smaller producers out of the market, leading to a reduction in supply and a potential recovery in prices [6]. - In contrast, the real estate market faces challenges in reducing supply due to the nature of ownership and the presence of a large number of second-hand properties, complicating the recovery process [6].

Industry Overview - Ejiao is a solid glue made from the dried skin or fresh skin of donkeys, known for its health benefits such as blood replenishment and immune enhancement [1][4] - The industry is currently in a growth phase, with over 200 manufacturers in China, and the market is expected to expand due to rising health awareness and disposable income [6][16] Product Classification - Ejiao products can be classified into three categories: medicinal products, health supplements, and food products, with specific regulatory approvals required for each [2] Industry Chain Analysis - The ejiao industry chain consists of donkey breeding (upstream), ejiao production and processing (midstream), and sales channels including hospitals, retail pharmacies, and e-commerce platforms (downstream) [4][5] Market Size and Growth - The ejiao market size in China is projected to reach approximately 29.1 billion yuan by 2024, with a significant increase in production from 7,460 tons in 2019 to 13,768.84 tons in 2024 [13][16] Competitive Landscape - The ejiao market is characterized by a duopoly, with Dong'e Ejiao and Fupai Ejiao dominating the market, holding 70% and 10% market shares respectively [20][21] - The top brands in the ejiao industry include Dong'e Ejiao, Fupai Ejiao, and Tongrentang, with Dong'e Ejiao leading in brand recognition [18][19] Regional Development - Shandong province is a key player in the ejiao industry, with 203 production enterprises and significant government support for industry development [21][23] - The consumption of ejiao is particularly strong in East China, where traditional practices drive demand [24] Industry Trends - The ejiao industry is expected to see a shift towards high-end and differentiated products, with increasing competition as new players enter the market [28] - The market is projected to grow to nearly 40 billion yuan by 2030, with a compound annual growth rate of 5.3% [29]

Group 1 - The core industry of Dong'a County is the production of Ejiao, with 106 companies and an annual production capacity of 10,000 tons, generating a total output value of 7.15 billion yuan and employing over 20,000 people [1][2] - The local government is actively supervising the Ejiao industry to ensure a fair business environment, having initiated 21 cases related to misconduct in law enforcement, resulting in 21 disciplinary actions and 2 detentions [1][2] - The county's disciplinary committee has established a comprehensive oversight platform that includes 68 items across 17 departments to enhance service and regulatory efficiency for Ejiao enterprises [2] Group 2 - The local government aims to reduce excessive law enforcement actions and improve the operational environment for Ejiao companies by promoting joint law enforcement actions and lowering inspection frequency [2] - The initiative is part of a broader strategy to optimize the business environment and support the healthy development of the Ejiao industry, reinforcing its reputation as a premium product [2]