Core Insights - The Wuhan International Pet Trade Fair and Trendy Pet Expo will take place from November 21-23, gathering over 3,000 brands, 30,000 professional buyers, and 60,000 pet enthusiasts, covering various segments such as pet food, supplies, smart devices, and medical services [1] - The strategic upgrade of the expo aims to transform the pet industry from "exhibition" to "trade," focusing on three major transitions: from "viewing" to "transaction," from "resource integration" to "function expansion," and from "traffic-driven" to "value-driven" [1] Industry Growth - The pet-related business market in China has shown a robust growth trajectory, with a compound annual growth rate of 25.4%, increasing from 97.8 billion yuan in 2015 to 592.8 billion yuan in 2023, and is projected to reach 811.4 billion yuan by 2025 [2] - Pet owners are increasingly willing to invest in food, medical care, supplies, and services for their pets, indicating a strong consumer trend towards enhancing pet care [2] Event Features - The pet trade fair will host various high-profile pet industry competitions and diverse interactive activities, creating an integrated "exhibition + entertainment" experience [2]

Core Insights - The pet consumption market is evolving from basic needs to personalized, emotional, and refined demands, becoming a significant growth point in the consumer market [1] - The total transaction volume (GMV) for pet categories on Douyin e-commerce has increased by 95% year-on-year since 2025, with emerging brands in the pet category growing by 75% [1] - The user base for pet categories has grown by 66% since 2025, with a notable 72% increase in order volume from users aged 50 and above [1] Group 1 - The future of pet consumption is centered around "refined pet care" and diverse needs, providing new growth opportunities for businesses, particularly in nutrition and smart products [2] - Douyin's unique content ecosystem and social attributes help brands accurately reach consumer demands, driving an upgrade in consumption patterns [2] - The pet brand "Guiwei" has shifted from 70% offline revenue to 70% online revenue through live e-commerce, leveraging Douyin's traffic support and user feedback [2] Group 2 - The online pet market is expected to maintain double-digit growth in 2024, with Tmall, JD, and Douyin contributing a total sales volume of 50.231 billion yuan [3] - Among these platforms, Tmall leads in sales, while Douyin shows the fastest growth rate with a year-on-year increase of 19% [3]

Core Insights - Douyin e-commerce's pet category GMV has increased by 95% year-on-year since 2025, indicating a significant growth trend in the pet consumption market [1] - The fastest-growing product categories include smart pet devices, health products for cats and dogs, and toys, reflecting a shift towards higher-order nurturing and emotional needs [1] - The data suggests that pet consumption is evolving from traditional basic needs to personalized, emotional, and refined demands, becoming an important growth point in the consumer market [1]

Core Insights - Douyin e-commerce released the "2025 Douyin E-commerce Pet Consumption Trend Report," indicating significant growth in the pet category's GMV (Gross Merchandise Volume) by 95% year-on-year since 2025 [1] - Emerging brands in the pet category have seen a year-on-year growth of 75%, highlighting a shift towards new consumer trends [1] - Non-traditional pet products, such as supplies for reptiles, birds, and other small pets, have opened new consumption channels through video marketing [1] - In mainstream cat and dog care scenarios, high-demand products like smart pet devices, health products, and toys are experiencing the fastest growth in order volume [1]

Core Viewpoint - In the first half of the year, China's goods trade imports and exports achieved a growth rate of 2.9%, demonstrating strong resilience despite complex international circumstances [1][2]. Trade Performance - China's total goods trade reached 21.79 trillion yuan, with exports of 13 trillion yuan (up 7.2%) and imports of 8.79 trillion yuan (down 2.7%) [2]. - In June, the trade volume was 3.85 trillion yuan, with exports at 2.34 trillion yuan (up 7.2%) and imports at 1.51 trillion yuan (up 2.3%) [2]. External Environment and Policy Support - The resilience of China's foreign trade is attributed to a series of supportive policies, which have helped restore business confidence and invigorate new industries [1][2]. - The latest customs trade survey indicates a continuous recovery in confidence among both export and import enterprises [2]. Market Expansion - China's trade relationships expanded, with growth in imports and exports to over 190 countries and regions, and the number of trading partners with a scale exceeding 50 billion yuan increased to 61 [2]. Export Dynamics - The decline in exports to the U.S. has narrowed significantly, contributing positively to overall export performance [3]. - The U.S. has begun to stockpile goods in response to new tariff adjustments, highlighting the irreplaceable nature of China's supply chain [4][5]. Emerging Sectors and Product Growth - There is a notable increase in the export of high-quality green products, with lithium batteries and wind turbine generators seeing growth rates exceeding 20% [6]. - Exports of industrial robots surged by 61.5%, and high-value products like pet supplies and smart manufacturing items have also seen significant growth [6][7]. E-commerce and Consumer Trends - E-commerce platforms reported a dramatic increase in overseas orders, with Alibaba's international site seeing a 42% year-on-year increase in order volume [4]. - During the "618" shopping festival, there was a three-digit growth in overseas orders for certain products, particularly in the pet product category [6].

Core Insights - The pet economy in China is experiencing rapid growth, with the market size expected to exceed 580 billion yuan by the end of 2024, representing a more than 200% increase since 2020 and an annual compound growth rate of 15.3% [1] - The demand for professionals in the pet industry, such as veterinarians and pet nurses, is increasing, leading to more vocational schools offering related programs [2] - Young people are becoming the primary pet owners, with 41.2% of pet owners being born in the 1990s and 25.6% in the 2000s, indicating a shift in pet ownership demographics [6] Industry Growth - The pet industry is projected to grow significantly, with contributions mainly from pet food, medical services, and smart devices [1] - The number of vocational schools offering animal-related programs is increasing, with 168 schools in 2024 and expected to rise to 181 by 2025 [2] - The enrollment ratio for pet-related programs is also increasing, as seen in institutions like Jiangsu Agricultural and Animal Husbandry Vocational College, which expanded its enrollment by 217 students [2] Consumer Behavior - Pet owners are increasingly viewing pets as family members, leading to higher spending on pet care, with an average annual expenditure of over 6,000 yuan per pet [6] - The emotional connection between pet owners and their pets is driving the growth of the pet economy, with many owners willing to invest in insurance and regular health check-ups for their pets [4][6] - Young pet owners are more likely to personalize their pets' experiences, such as hosting birthday parties and dressing them in outfits, reflecting a shift in pet ownership culture [5] Educational Trends - Many students enrolling in pet-related programs have personal experience with pets, which enhances their understanding and empathy in the field [8] - Institutions are adapting their curricula to include new courses related to the evolving pet economy, such as pet emergency care and pet media [14] - Practical training is emphasized, with programs like "2+1" allowing students to spend two years in school and one year in internships, leading to high employment rates post-graduation [13] Regulatory Environment - Recent legislative changes, such as the revised Animal Epidemic Prevention Law, have clarified the legal status of pet medical institutions and established standards for the industry [7] - Government support is crucial for the pet industry's growth, as it helps to build consumer confidence and establish clear industry standards [6]

Investment Rating - The investment rating for the company is upgraded to "Buy" [6] Core Views - The company has significant revenue growth potential, particularly in the electronic cigarette business, which is expected to see substantial volume growth [4][9] - The company has set ambitious revenue targets for 2025 and the following years, with cumulative revenue goals of 44.625 billion, 92.82 billion, and 144.585 billion yuan for 2025, 2025-2026, and 2025-2027 respectively [2][4] Summary by Sections Equity Incentive and Employee Stock Ownership Plans - The company has proposed a 2025 equity incentive plan, granting stock options to up to 921 middle management and key technical personnel at a price of 13.70 yuan per option, totaling no more than 21.65 million options, which accounts for 2.79% of the total share capital [2][4] - An employee stock ownership plan has also been proposed, allowing six executives, including the chairman, and up to 455 middle management personnel to purchase up to 12.35 million repurchased shares at a price of 11.3 yuan per share, representing 1.59% of the total share capital [2][4] Revenue Growth Potential - The electronic cigarette business is expected to contribute the majority of revenue growth, with a projected revenue increase of over 100% in 2025 due to resolved labor issues affecting 2024 orders [9] - The automotive electronics business is anticipated to grow by approximately 30% in 2025, driven by rapid development in rearview mirrors and cockpit control modules [9] - Other existing businesses are expected to maintain steady growth, with increased orders in engraving machines and recovery in health and environmental sectors [9] Profitability Outlook - The increase in the proportion of high-margin electronic cigarette business and the dilution of expense ratios due to scale effects are expected to drive net profit margins higher [9] - The company aims to achieve net profits of 2.5 billion, 5.0 billion, and 6.6 billion yuan for the years 2024 to 2026, corresponding to P/E ratios of 54, 27, and 21 respectively [9]