Investment Rating - The industry investment rating is "Positive" and maintained [9] Core Insights - The 2025 618 shopping festival saw a significant rise of domestic high-end pet food brands, with leading companies expanding their brand matrix advantages. Notably, brands like Frigate and leading positions on Tmall have shown remarkable improvements. It is expected that in Q2, Guibao and Zhongchong's proprietary brands will maintain over 30% growth [2][15] - On the export front, the export value of cat and dog snacks to the US in Q2 2025 decreased by 52.5% year-on-year due to tariff impacts. Guibao's export revenue is expected to decline by around 10%, while Zhongchong, benefiting from its US factory layout, is projected to achieve a 15% growth in export revenue [2][5][15] Summary by Sections Export Impact and Factory Layout - In Q2 2025, pet snack exports faced significant declines due to tariffs, with a global year-on-year growth rate of -9.6% and a sharper decline of -52.5% for exports to the US. Guibao's revenue is expected to drop by 10%, while Zhongchong's revenue is projected to grow by 15% due to its factory in the US [5][16][22] Domestic Sales Growth - The domestic pet food market continues to show high growth, with Q2 2025 online sales growth at 9.4%. Guibao's proprietary brand online sales surged by 44%, with its main brand, Maifudi, growing by 16% and the high-end sub-brand Frigate experiencing a remarkable 146% growth [6][25][30] Brand Performance in 618 Festival - The 2025 618 shopping festival highlighted the rise of domestic high-end brands, with four out of the top five brands on Tmall being domestic. Frigate, Xianlang, and other brands have shown continuous ranking improvements, indicating a strong brand matrix advantage among leading companies [7][39][41]

Core Viewpoint - The article highlights the growth and expansion of Zhongchong Co., a leading player in the pet food industry, particularly under the leadership of its founder, Hao Zhongli, who has made significant investments and strategic moves to enhance the company's market position and global footprint [1][4][22]. Company Overview - Zhongchong Co. has invested over 800 million yuan in New Zealand, acquiring the high-end pet food brand ZEAL and establishing three production bases [1]. - The company started from pet snack OEM and now owns several brands, including Wanpi and Zhenzhi, with 22 production bases globally [3][22]. - The stock price of Zhongchong Co. has increased nearly 80% since the beginning of the year, indicating strong market performance [4]. Financial Performance - From 2022 to 2024, Zhongchong's revenue is projected to rise from 3.248 billion yuan to 4.465 billion yuan, while net profit is expected to grow from 106 million yuan to 394 million yuan, nearly quadrupling [7]. - The company's gross margin was 29.13% last year, which is lower than its competitor, Guobao Pet, at 42.32% [10][11]. - The company has improved its domestic gross margin to 35.18% through product restructuring and the introduction of high-margin products [11]. Market Strategy - Zhongchong Co. focuses on the mid-to-high-end market, leveraging a "domestic brand + cost performance" strategy [9]. - The company has shifted from an OEM model, which contributed 58% of its revenue, to a self-operated sales model, with over 68% of revenue coming from overseas [14]. - The company has established a strong online presence, with e-commerce channels accounting for approximately 70% of total pet sales in China [17]. Marketing and Branding - The company employs various marketing strategies, including collaborations with celebrities and social media influencers, to enhance brand visibility [18]. - In 2022, online sales of its proprietary brands accounted for 60% of domestic revenue, while offline sales made up 40% [19]. Research and Development - Zhongchong Co. invested 72.68 million yuan in R&D last year, a year-on-year increase of over 50%, representing 1.63% of total revenue [20]. Global Expansion - The company has established 22 production bases worldwide, including in the U.S., Canada, and New Zealand, and products are sold in 85 countries [22][23]. - The U.S. factory, built with an investment of 28 million USD, became profitable in its first year of operation [21]. - The company plans to expand its production capacity in North America, with a second factory expected to be completed by 2026 [24].