1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The prices of petrochemical products are highly correlated with oil prices, and the gross margins of companies in the packaging, light - industry export, and personal care sectors are affected by oil price fluctuations. However, companies can end the negative correlation between gross margin and oil price through price - conduction mechanisms, cost - control optimization, and product - structure upgrading. There are significant differences in the performance of different companies in terms of gross margin and stock price [4][11]. 3. Summary by Relevant Catalogs 3.1 Petrochemical Raw Materials in Different Sectors - In the packaging sector, companies like New Giant Hand, Yongxin Co., Ltd., Jialian Technology Co., Ltd., Gongchuang Lawn Co., Ltd., and Tianzhen Co., Ltd. use polyethylene, PE film, PP, etc. as raw materials, with the proportion of petrochemical raw materials in operating costs ranging from 20% to 64% [3]. - In the light - industry export sector, companies such as Haixiang New Materials Co., Ltd., Aili Home Co., Ltd., Mengbaihe Co., Ltd., Yuma Sunshade Co., Ltd., and Zhejiang Natural Co., Ltd. use PVC resin powder, ether, TDI, etc., with the proportion of petrochemical raw materials in operating costs ranging from 22% to 36% [3]. - In the personal care sector, companies including Baiya Co., Ltd., Yiyi Co., Ltd., Keao Co., Ltd., and Mengyue Care Co., Ltd. use non - woven fabrics, PE film, SAP, etc., with the proportion of petrochemical raw materials in operating costs ranging from 39% to 48% [3]. 3.2 Oil Price Fluctuations and Company Gross Margins - The two recent periods of unilateral upward oil prices were from 2016Q2 - 2018Q3 and 2020Q3 - 2022Q3. In the second cycle, from 2020Q3 - 2022Q3, Brent crude oil rose by $71.1 per barrel, a 195% increase. The gross margin differentiation of relevant companies was more obvious than in the first cycle. For example, the gross margin declines of Yongxin Co., Ltd., Jialian Technology Co., Ltd., and Yuma Sunshade Co., Ltd. were significantly lower than those of other companies, and Baiya Co., Ltd. achieved an increase in gross margin [6][12]. - In 2020, due to the global pandemic and the price war among oil - producing countries, oil prices were at a historical low, but the profitability of the sector did not increase collectively. One reason was that most companies implemented the new revenue standard, including transportation, customs clearance, and port charges in costs. In addition, the appreciation of the RMB also had a negative impact on gross margin. From 2021 - 2022, with economic stimulus policies and high inflation, oil prices were high. In 2021, the profitability of the sector continued to be under pressure. In 2022, although oil prices continued to rise, thanks to price increases and the company's own management efforts, the overall profit - margin fluctuations began to narrow, and the profit margins of some companies started to reverse [9]. - From 2020Q3 - 2021Q4, the gross margins of relevant companies were affected by oil prices and declined unilaterally for multiple consecutive quarters. In 2022, although oil prices continued to rise in the first and second quarters, companies' gross margins generally improved quarter - on - quarter through price - conduction mechanisms, cost - control optimization, and product - structure upgrading, ending the negative correlation in advance [11]. 3.3 Raw Material Procurement and Product Pricing Mechanisms - Different companies have different raw - material procurement and product - pricing mechanisms. For example, New Giant Hand uses spot procurement with a short inventory cycle and determines prices with major customers at the end of each year; Yongxin Co., Ltd. purchases raw materials at market prices and adjusts product prices according to raw - material price ranges; Jialian Technology Co., Ltd. uses centralized procurement and determines prices through order negotiation [20]. 3.4 Companies with Stronger Profit - Margin Resilience - Yongxin Co., Ltd., Yuma Sunshade Co., Ltd., Zhejiang Natural Co., Ltd., and Baiya Co., Ltd. showed better profit - margin resilience. Yongxin Co., Ltd. extended its industrial chain and had pricing power; Yuma Sunshade Co., Ltd. had a large number of SKUs and strong pricing power for new products; Zhejiang Natural Co., Ltd. customized products and considered multiple factors for pricing; Baiya Co., Ltd. had stable profits in the consumer - goods model [24].

Summary of Yi Yi Co. Conference Call Company Overview - Yi Yi Co. has focused on pet care products since the early 2000s, becoming a leading exporter in the industry with a stable export share of 30% to 40% [3][4] - The company acquired Gao Yijia to enhance its C-end operational experience and expand its product range, aiming for better synergy [2][3] Financial Performance - From 2017 to 2024, Yi Yi Co. is expected to achieve a compound annual growth rate (CAGR) of approximately 13% in revenue [2][5] - Despite external pressures in the first three quarters of 2025, revenue growth is anticipated to recover due to order restoration and overseas capacity release [2][5][6] - The company maintains a strong financial position with ample cash reserves, low debt-to-asset ratio, and high dividend payout ratio, projected at nearly 80% in 2024, with a dividend yield of 5.26% [2][5][6] Future Growth Expectations - By 2026, without considering acquisition synergies, revenue and profit are expected to grow by nearly 20%, driven by the expansion of overseas clients and improvement in orders from existing major clients [2][7] - The company is also seeing an increase in order share from Costco [7] Industry Insights - The pet supplies industry is projected to maintain a high single-digit to low double-digit CAGR in the coming years [2][9] - The U.S. remains the largest market, with China holding a leading share in U.S. imports at 70% to 80% [9] - The domestic market is rapidly developing, with a historical CAGR of mid-double digits to mid-high single digits [9] Consumer Trends - The domestic pet economy is driven by emotional value consumption, with a younger consumer demographic increasingly participating [10] - Over 60% of consumers are willing to pay for emotional value, with cat ownership becoming more popular due to lower companionship needs [10] Competitive Landscape - The pet consumer goods market is experiencing rapid growth, attracting various brands to diversify into pet products [11] - Major trends include the rise of cross-category brands in cleaning products, apparel, and smart products [11] Product Category Developments - Cat food is becoming more premium and segmented, with both domestic and foreign brands competing [12] - The sales growth of cat litter products has slowed, while smart products like automatic litter boxes are seeing significant growth [12] Company’s R&D and Production Capabilities - Yi Yi Co. has a strong focus on R&D, leading to continuous improvement in unit gross profit [13] - The company is expanding its overseas manufacturing capabilities, including a factory in Cambodia, to enhance its competitive edge [13] - The integration of the supply chain is aimed at stabilizing cost fluctuations, with recent acquisitions supporting brand expansion and operational experience [13]