Core Viewpoint - The pet industry in China is experiencing significant growth, with leading companies like Guai Bao Pet and Zhong Chong Co. achieving record-high stock prices and strong financial performance, indicating robust market demand and operational efficiency [1][2][3]. Company Performance - Guai Bao Pet and Zhong Chong Co. reported impressive revenue and net profit growth for 2024, with Guai Bao Pet achieving a revenue increase of 21.22% and a net profit growth of 45.68%, while Zhong Chong Co. saw a revenue increase of 19.15% and a net profit growth of 68.89% [2][4]. - In Q1 2025, Guai Bao Pet's revenue and net profit both grew over 34%, and Zhong Chong Co. reported a net profit increase of 62.13% [2][3]. - Other companies like Lu Si Co. and Pei Di Co. also showed positive trends, with Lu Si Co. achieving a net profit growth of 14.57% in 2024 and Pei Di Co. turning a profit with a staggering net profit increase of 1742.81% [2][3][4]. Market Trends - The pet food market in China is projected to reach a scale of 158.5 billion yuan in 2024, growing at a rate of 8.5% [7]. - The shift in consumer behavior towards higher-quality and more diverse pet products is driving demand, particularly in the staple food segment, which has seen its market share increase from 62.4% in 2017 to 67.6% in 2024 [7]. - E-commerce platforms like Douyin and Pinduoduo are contributing to the rapid growth of online sales channels for pet food [7]. International Expansion - Zhong Chong Co. has established a comprehensive tariff response system and is the only Chinese company with pet snack factories in the U.S. and Canada, which mitigates the impact of trade policy changes [9][10]. - The company is expanding its production capacity in North America, with plans for a second factory in the U.S. by 2026 and ongoing expansion in Canada [10]. - Guai Bao Pet is also focusing on diversifying its overseas market presence to reduce reliance on U.S. exports amid trade tensions [10].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown rapid growth in its proprietary brand, leading the rise of domestic products in the pet food industry [8] - The company is a leading player in the domestic pet food market, benefiting from strong brand power, product strength, R&D capabilities, and channel advantages [8] - The company has adjusted its net profit forecasts for 2025 and 2026 upwards, reflecting strong growth momentum in domestic brands [8] Financial Performance Summary - For 2024, total revenue is projected at 5.245 billion yuan, representing a year-on-year growth of 21.22% [8] - The net profit attributable to the parent company for 2024 is expected to be 624.72 million yuan, with a year-on-year increase of 45.68% [8] - The company's gross margin reached 42.3% in 2024, an increase of 5.4 percentage points year-on-year [8] - The net profit margin for 2024 is projected at 11.9%, up by 2 percentage points year-on-year [8] Business Segment Analysis - In 2024, revenue from proprietary brands and OEMs is expected to be 3.5 billion yuan and 1.7 billion yuan, respectively, with year-on-year growth rates of 29% and 19% [8] - The main product categories, staple food and snacks, are projected to generate revenues of 2.7 billion yuan and 2.5 billion yuan, with year-on-year growth rates of 29% and 15% [8] - Domestic and international revenues are expected to be 3.6 billion yuan and 1.7 billion yuan, with year-on-year growth rates of 24% and 16% [8] Future Projections - The company forecasts net profits of 819 million yuan for 2025 and 1.017 billion yuan for 2026, with corresponding P/E ratios of 49 and 39.86 [8] - The net profit for 2027 is projected at 1.242 billion yuan, with a P/E ratio of 32.65 [8]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown rapid growth in its own brand, leading the rise of domestic products in the pet food industry [8] - The company is a leading player in the domestic pet food market, benefiting from strong brand power, product strength, R&D capabilities, and channel advantages [8] - The company has adjusted its net profit forecasts for 2025 and 2026 upwards, reflecting strong growth momentum in domestic brands [8] Financial Performance Summary - For 2024, total revenue is projected to be 5.245 billion yuan, representing a year-on-year growth of 21.22% [1] - The net profit attributable to the parent company for 2024 is expected to be 624.72 million yuan, with a year-on-year increase of 45.68% [1] - The company's gross margin reached 42.3% in 2024, an increase of 5.4 percentage points year-on-year [8] - The company’s net profit margin for 2024 is projected at 11.9%, up by 2 percentage points year-on-year [8] Revenue Breakdown - In 2024, revenue from the company's own brand and OEM (Original Equipment Manufacturer) is expected to be 3.5 billion yuan and 1.7 billion yuan, respectively, with year-on-year growth rates of 29% and 19% [8] - The main products, staple food and snacks, are projected to generate revenues of 2.7 billion yuan and 2.5 billion yuan in 2024, with year-on-year growth rates of 29% and 15% [8] Market Position and Strategy - The company has a strong ability to innovate, with continuous high-end upgrades of new products and a successful multi-brand strategy [8] - The flagship brand, Mai Fudi, has maintained the top position in the Tmall comprehensive ranking for five consecutive years [8] - The company is expanding its high-end dog food brand, Wang Zhen Chun, which is expected to become a new growth point for performance [8]