Core Viewpoint - Daqian Ecological Environment Group Co., Ltd. reported a significant net loss of 15.90 million yuan in the first half of the year, marking a 223.94% decline year-on-year, attributed to the costs associated with its new pet service business [2][6]. Financial Performance - The company's revenue for the first half of the year was 55.15 million yuan, a year-on-year increase of 10.02% [2]. - The net cash flow from operating activities was -97.34 million yuan, a decline of 268.24% year-on-year [2]. - Sales expenses surged to 17.69 million yuan, reflecting a 1013.98% increase due to the expansion into the pet business [6]. Business Segments - The ecological construction business saw a significant revenue drop of 86.64% year-on-year, while the cultural tourism operation business experienced a revenue increase of 116.85% [4]. - The newly launched pet service and sales business generated 9.08 million yuan in revenue, accounting for 16.47% of total revenue [4]. Strategic Initiatives - Daqian Ecological established a wholly-owned subsidiary, Jiangsu Qianchongjia Technology Co., Ltd., in March to develop a comprehensive pet service brand [3]. - The company has opened 20 pet service stores in major cities like Beijing, Shanghai, Nanjing, and Hangzhou, focusing on an "experience + retail" model [3]. Market Outlook - The pet economy is viewed as a promising sector, with projections indicating that China's pet consumption market will reach 300.2 billion yuan in 2024, a 75.76% increase from 2018 [6]. - The company aims to integrate resources and explore opportunities in the pet consumption sector while maintaining its traditional business [9]. Ownership Changes - In November 2024, the "Bubugao system" acquired an 18.09% stake in Daqian Ecological, with plans to leverage the company for resource integration in emerging consumer sectors [6][9]. - The "Bubugao system" has a pet social platform named "Chongpangpang," which is expected to be integrated into Daqian Ecological [6].

Core Viewpoint - The market speculates that Daqian Ecology may be planning to list its core pet asset, Chong Pang Pang, through a backdoor listing, despite the company's repeated denials of any acquisition plans. This speculation has led to a significant increase in Daqian Ecology's stock price, reflecting high market expectations for its pet economy strategy [1][2]. Group 1: Stock Performance and Market Reaction - Daqian Ecology's stock price surged from 17.14 yuan to 33.07 yuan, achieving a maximum increase of 93% following the speculation about the pet economy [1]. - The stock experienced a remarkable rise of 124% in April alone, driven by the entry of the Bubu Gao Group as a controlling shareholder [1]. - Following the acquisition announcement, Daqian Ecology's stock hit a seven-year high of 36.58 yuan, with a cumulative increase of 280%, raising its market capitalization from under 1.5 billion yuan to over 4 billion yuan [2]. Group 2: Acquisition and Corporate Strategy - Bubu Gao Group acquired an 18.09% stake in Daqian Ecology for 368 million yuan, becoming the controlling shareholder, with Zhang Yuan as the actual controller [1][2]. - Daqian Ecology, previously facing delisting risks, is now being revalued as a "pet economy concept stock" due to its strategic pivot towards the pet industry [2][4]. - The establishment of Jiangsu Qianchongjia Technology Co., a wholly-owned subsidiary, is part of Daqian Ecology's strategy to integrate pet services, although the company denies any significant changes to its main business [2][4]. Group 3: Future Prospects and Challenges - Daqian Ecology's future in the pet economy hinges on its ability to establish a comprehensive service model, integrating online and offline resources through the Chong Pang Pang platform [5][6]. - The company plans to apply for a credit line of up to 2 billion yuan for 2025 to support its expansion in the pet services sector [6]. - Despite the optimistic market sentiment, Daqian Ecology's current valuation appears high, with a PE ratio of 148, compared to 72 for leading companies in the pet economy [6].