Core Insights - The number of pets in China has surpassed the number of infants under four years old, with projections indicating that by 2030, the number of pets will be nearly double that of infants, highlighting a significant market opportunity [1] - Recently, Ruipai Pet Hospital has submitted an IPO application to the Hong Kong Stock Exchange, aiming to expand its presence in the pet medical services sector [1] Company Overview - Ruipai Pet Hospital operates over 500 pet hospitals and is recognized as the second-largest pet medical service provider in China [1] - The company generates approximately 90% of its revenue from diagnostic and treatment services, with additional income from pet product sales and grooming services [4][5] Financial Performance - Ruipai Pet Hospital reported a revenue increase from approximately 14.55 billion RMB in 2022 to 17.58 billion RMB in 2024, achieving profitability in the first half of 2025 [9] - The company's gross profit margins have shown some fluctuation, with a reported margin of 24.8% in the first half of 2025, up from 22.2% in 2024 [9][10] Market Dynamics - The pet medical industry in China is projected to grow significantly, with an expected market size of 366 billion RMB in 2024, increasing to 1.39 trillion RMB by 2035 [16] - The competitive landscape is intense, with approximately 30,000 pet hospitals nationwide, and Ruipai holds a market share of 4.8% [18] Growth Strategy - Ruipai Pet Hospital has engaged in numerous strategic acquisitions to expand its network, with 77.5% of its operational hospitals being acquired [11] - The company plans to use the funds raised from the IPO to enhance its hospital network, improve service capabilities, and invest in technology and marketing [22] Risks and Challenges - The company faces risks related to high goodwill from acquisitions, with goodwill reported at 1.79 billion RMB as of June 2025, and significant net current liabilities of 2.46 billion RMB [12] - The competitive environment may pressure the company to invest more in R&D and marketing to maintain its market position [18]

Core Viewpoint - The company Ruipai Pet Hospital is aiming to become the first publicly listed pet medical service provider in China, backed by major capital players like Goldman Sachs and Mars, amid a growing demand for pet healthcare services in urban areas [1][2]. Company Overview - Ruipai is the second-largest pet medical service provider in China, with 548 operational hospitals as of June 30, 2025, and is the only large national chain to achieve profitability by that date [2][3]. - The founder, Li Shoujun, transitioned from animal health to pet medical services, establishing a complete industry chain from research and production to service [3]. Financial Performance - Revenue figures for Ruipai from 2022 to 2025 are as follows: 14.55 billion RMB in 2022, 15.85 billion RMB in 2023, and 17.58 billion RMB in 2024, with 9.43 billion RMB in the first half of 2025, reflecting an 8.49% year-on-year growth [4]. - The company has a unique profitability trajectory, recording a net profit of 15.54 million RMB in the first half of 2025, with an adjusted net profit margin of 7.7% [11]. Expansion Strategy - Ruipai's growth strategy includes acquiring regional brands, with 428 out of 548 hospitals acquired, representing 77.5% of its network [4]. - The company has shifted from aggressive expansion to a focus on optimizing existing operations, evidenced by a reduction in the number of community hospitals while increasing regional center hospitals [15]. Industry Context - The pet healthcare market in China is rapidly growing, with over 120 million pet dogs and cats and a market size of 300.2 billion RMB, where pet medical services account for 28% of the total [7]. - Despite high consumer spending on pet healthcare, many pet hospitals struggle with profitability, with over 60% of them seeing fewer than 10 consultations per day [10]. Operational Challenges - Ruipai faces challenges related to integration and standardization of its acquired hospitals, with issues of compliance and quality control arising in several locations [18][19]. - The company has been criticized for high procurement costs from its largest supplier, which is also controlled by its founder, raising concerns about potential conflicts of interest [19]. Future Plans - Ruipai plans to use funds from its IPO to expand its hospital network, enhance health management services, and develop its information technology infrastructure [19]. - The company is focusing on specialized services to improve its competitive edge in a market that is transitioning from fragmented to concentrated [20].

Core Viewpoint - Ruipai Pet is set to become the "first stock in China's pet medical industry" as it submits its IPO application to the Hong Kong Stock Exchange, following the failed IPO attempt of its competitor, New Ruipeng, which withdrew its application in 2024 due to ongoing operational challenges and market conditions [1][2]. Industry Overview - The domestic pet medical industry is characterized by a fragmented competitive landscape, with a chain rate of only 22% and a CR5 of 15.4% in 2024, indicating low market concentration [1][2]. - The market for chain pet medical services is projected to grow from 11 billion yuan in 2024 to 22.6 billion yuan by 2030, with a CAGR of approximately 12.6%, and is expected to double to 49.4 billion yuan by 2035, with a slightly accelerated CAGR of 17% [1]. Company Performance - Ruipai Pet's financial performance is stronger than that of New Ruipeng, which reported a cumulative net loss of 4 billion yuan from 2019 to 2022. In contrast, Ruipai Pet achieved profitability in most years from 2022 to the first half of 2025, with adjusted net profit margins ranging from 3.9% to 7.7% [2][3]. - The company's gross margin is reported to be between 21% and 25%, with its core diagnostic services accounting for over 90% of revenue but only achieving a maximum gross margin of 22.7% [3]. Business Model Differences - Ruipai Pet employs a VDP model for acquisitions, retaining 40% of the original team's equity, which helps maintain operational stability and reduces talent loss, unlike New Ruipeng's aggressive full acquisition strategy [5][6]. - The operational efficiency of Ruipai Pet is enhanced by a three-tier medical collaboration system, which allows for better resource allocation and service quality control, contrasting with New Ruipeng's less efficient operational model [6][7]. Challenges and Risks - Ruipai Pet faces potential goodwill risks due to its acquisition strategy, with goodwill accounting for 68.4% of non-current assets and 51% of total assets as of the first half of 2025 [9]. - The overall profitability of the pet medical industry remains weak, with leading companies either operating at a loss or with thin margins, indicating a low ceiling for growth in the sector [10].

Core Viewpoint - The article discusses the growth and development of Ruipai Pet, a national chain of pet medical institutions in China, founded by Li Shoujun, who transitioned from a state-owned enterprise to entrepreneurship. The company is preparing for a potential listing on the Hong Kong stock market, which could enhance its presence in the international capital market [2][3]. Group 1: Company Overview - Ruipai Pet was established in December 2012 with a registered capital of 100 million yuan, primarily owned by Zhongrui Huapu and individual shareholders [3]. - The company has undergone multiple financing rounds, raising a total of 2.147 billion yuan from investors including Mars China and Goldman Sachs [3][4]. - As of the first half of 2025, Ruipai Pet operates 548 pet hospitals, making it the second-largest pet medical service provider in China [19]. Group 2: Financial Performance - Ruipai Pet's revenue has shown consistent growth, with figures of 1.455 billion yuan in 2022, 1.585 billion yuan in 2023, and projected 1.758 billion yuan in 2024, alongside a revenue of 943.13 million yuan in the first half of 2025, reflecting an 8.52% year-on-year increase [19][20]. - The core business of diagnostic services has also seen growth, with revenues of 1.296 billion yuan in 2022 and projected 1.593 billion yuan in 2024 [19]. - The gross profit margin for Ruipai Pet has fluctuated, with a margin of 22.4% in 2022, 21.0% in 2023, and increasing to 24.8% in the first half of 2025 [27][28]. Group 3: Ownership and Control - Li Shoujun, the actual controller of Ruipai Pet, holds a 26.91% stake in the company through Zhongrui Huapu and Ruipu Biology [8]. - The company has seen various shareholders transfer their stakes, with significant transactions occurring in 2020 and 2022, indicating active management of equity [5][6]. Group 4: Operational Insights - Ruipai Pet's hospitals are primarily acquired, with 428 out of 548 hospitals being obtained through acquisitions [21]. - The company has a diverse range of services, including pet product sales and grooming services, although these contribute a smaller portion of total revenue compared to diagnostic services [19][23]. - The average revenue contribution per city center hospital is significantly higher than that of community hospitals, indicating a strategic focus on higher-margin facilities [21]. Group 5: Future Prospects - Ruipai Pet is preparing for a potential IPO, which could provide additional capital for expansion and enhance its market position [2][3]. - The company has maintained positive operating cash flow, with net inflows of 2.92 billion yuan in 2022 and 2.63 billion yuan in the first half of 2025 [29].

Company Overview - Ruipai Pet Hospital Management Co., Ltd. is a national chain of pet medical institutions in China, focusing on high-standard diagnosis and health management services for pets [4] - The company was founded in 2012 and is recognized as the first nationwide chain pet medical service provider in China, aiming to establish a standardized and replicable pet health management service system [4][5] - As of June 30, 2025, the company operates 548 pet hospitals, including 120 self-built and 428 acquired hospitals, making it the second-largest pet medical service provider in China [5] Financial Performance - The company's revenue for the fiscal years 2022, 2023, 2024, and the first half of 2025 is approximately RMB 1.455 billion, RMB 1.585 billion, RMB 1.758 billion, and RMB 943 million respectively [6] - The total comprehensive income for the same periods shows losses of approximately RMB 61.86 million, RMB 250 million, RMB 0.7126 million, and a profit of RMB 15.28 million for the first half of 2025 [7] - The gross profit margins for the fiscal years are 22.4%, 21.0%, 22.2%, and 24.8% respectively, indicating an improvement in profitability [9] Industry Insights - The Chinese pet market is experiencing rapid growth, with the market size reaching RMB 300 billion in 2024 and projected to grow to RMB 602.5 billion by 2030 and RMB 1.1139 trillion by 2035, reflecting a compound annual growth rate (CAGR) of 12.3% and 13.1% respectively [10] - The pet medical sector is expected to grow from RMB 36.6 billion in 2024 to RMB 69.9 billion by 2030 and RMB 139.2 billion by 2035, with a CAGR of 11.4% and 14.8% [12] - High-tier cities in China account for 66.7% of pet hospitals and 75.8% of total revenue in the pet medical industry, with total revenue in these cities reaching RMB 27.8 billion in 2024 [14] Corporate Governance - The board of directors consists of nine members, including four executive directors, two non-executive directors, and three independent non-executive directors, all elected by the shareholders [16] - The board is responsible for the management and operations of the company, holding general powers of management [16] Shareholding Structure - Dr. Li is the largest single shareholder, controlling approximately 26.91% of the company's issued share capital through Zhongrui Huapu and Ruipubio [19]

(A joint stock company incorporated in the People's Republic of China with limited liability) The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. WARNING The publication of this Applicatio ...