Core Viewpoint - The report highlights significant growth in poultry vaccines and the potential for the pet segment, with a "buy" rating for the company [1][5]. Financial Performance - In H1 2025, the company achieved a net profit of 116 million yuan, a year-on-year increase of 57.12% [2]. - The total revenue for H1 2025 was 559 million yuan, reflecting a 15.79% increase compared to the previous year [2]. - The company's non-recurring net profit was 100 million yuan, up 50.79% year-on-year [2]. - The sales expense ratio and management expense ratio were 22.2% and 6.7%, respectively, down 5.6 percentage points and 2.5 percentage points year-on-year [2]. Product Performance - The animal health industry faced increased competition, particularly in the swine vaccine segment, which saw a revenue decline of 11.49% to 131 million yuan [3]. - Poultry vaccine revenue grew by 30.01% to 259 million yuan, driven by the new production base in Nanjing and a nearly 60% increase in high pathogenic avian influenza vaccine revenue [3]. - The revenue from pet-related products reached 10.07 million yuan, with significant growth in functional health products, which increased by 124.47% [4]. Market Strategy - The company is focusing on both offline and online marketing strategies for its pet products, achieving over threefold growth in online sales [4]. - Various marketing activities and partnerships with distributors are being utilized to promote key products like the cat trivalent inactivated vaccine [4]. Future Outlook - The company is projected to achieve revenues of 1.216 billion yuan, 1.414 billion yuan, and 1.596 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 16.6%, 16.3%, and 12.8% [5]. - Corresponding net profits are expected to be 181 million yuan, 234 million yuan, and 259 million yuan, with growth rates of 95.4%, 29.2%, and 10.5% [5].

Investment Rating - The report maintains a "Recommended" rating for the company, indicating a potential upside of over 15% relative to the benchmark index [6]. Core Insights - The company reported a revenue of 560 million yuan for the first half of 2025, representing a year-on-year increase of 15.8%, and a net profit attributable to shareholders of 120 million yuan, up 57.1% year-on-year [1]. - The growth in revenue is significantly driven by the poultry vaccine production capacity expansion and the performance of the pet product segment, which is gaining traction in the market [2][3]. - The company is actively enhancing strategic partnerships with large breeding groups to improve its market share in vaccines and chemical drugs, with innovative products contributing to revenue growth [2]. - The pet product segment is experiencing remarkable growth, with online sales increasing by over three times, reflecting the growing market for pet-related products [3]. Summary by Sections Financial Performance - In H1 2025, the biological products revenue reached 401 million yuan, a year-on-year increase of 13.17%. The revenue from poultry products grew by 30.01% to 259 million yuan, while pet products saw a 49.65% increase to 10 million yuan [1]. - The company expects net profits for 2025 to be 228 million yuan, with earnings per share (EPS) projected at 0.66 yuan, corresponding to a price-to-earnings (PE) ratio of 22 [4][5]. Market Trends - The pet industry is projected to grow significantly, with the market size expected to reach 404.2 billion yuan by 2027, driven by increasing consumer spending on pets [3]. - The company is focusing on both online and offline marketing strategies to promote its pet vaccines and related products, capitalizing on the growing trend of pet ownership [3]. Future Outlook - The company anticipates a recovery in demand for animal health products as the market enters a consumption peak in the second half of 2025, supported by strong genetic engineering capabilities and ongoing vaccine development [4].

Financial Performance - In Q1 2025, the company achieved a revenue of 8.22 billion yuan, representing a year-on-year growth of 20% [3] - The net profit attributable to shareholders was 1.16 billion yuan, with a year-on-year increase of 28.45% [3] - The non-recurring net profit reached 9.35 million yuan, showing a growth of 19.65% year-on-year [3] Business Strategy - The company is focusing on international brand strategy, marking its transition from a regional to a global brand [3] - A 56% stake acquisition in Zhongrui Supply Chain was completed, enhancing collaboration across core business segments [3] - The company is implementing a share repurchase plan, with a total repurchase amount of 120 million yuan as of March 31, 2025 [3] Product Development - The high pathogenic avian influenza vaccine generated 87 million yuan in revenue, a 16% increase year-on-year, while the Marek's vaccine revenue reached 26 million yuan, up 59% [4] - The company plans to launch new products, including a cat oral dewormer and various mRNA vaccines for pets, to enrich its product matrix [4][5] Market Expansion - The company has nearly 100% coverage of its top 100 customers in the traditional livestock sector and aims to deepen strategic cooperation with major clients [6][7] - The international strategy includes a dual circulation approach for product and technology, focusing on overseas market expansion and enhancing service capabilities [7] Impact of Tariffs - Export business accounts for approximately 3% of total revenue, indicating minimal direct impact from US-China tariffs [7] - The company is monitoring tariff policy changes to adjust its business layout and product strategies accordingly [7]