Company Overview - Zhejiang Hai Zheng Pharmaceutical Co., Ltd. has received approval for its new veterinary drug, non-rocoxib chewable tablets, which are designed to alleviate pain and inflammation in dogs [1] - The approval of this drug marks a significant milestone in the company's strategic positioning within the veterinary medicine sector, enhancing its market competitiveness [1] Business Development - Hai Zheng Pharmaceutical has been focusing on the pet medicine sector, transitioning from its original emphasis on economic animals since 1992, and has made notable progress in recent years [2] - As of the end of 2024, the company operates two production bases with 25 production lines and has over 40 products with 71 approved registration numbers [2] - The company's e-commerce performance has surpassed 100 million yuan in 2024, with a cumulative growth of 11 times over five years, indicating a strong expansion in its pet medicine business [2] Financial Performance - In 2024, the revenue from anti-parasitic and veterinary products reached 713 million yuan, reflecting a year-on-year decline of 14.07%, although the gross profit margin increased by 1.55 percentage points due to improved cost control [2] - Despite not yet achieving profitability, the subsidiary Hai Zheng Animal Health reported a revenue increase of 3.21% to 410 million yuan [2][3] Industry Trends - The pet medical industry in China is experiencing rapid growth, with the market size reaching 94 billion yuan in 2024, a year-on-year increase of 14.49% [4] - The approval of 52 new pet drugs by the Ministry of Agriculture and Rural Affairs in 2024, with 31 being domestically produced, indicates a significant enhancement in domestic drug development capabilities [4] - The integration of AI technology in the pet medical field, exemplified by the launch of the Vet1 AI model, represents a breakthrough in the industry [4] Future Outlook - The pet medical market is expected to continue expanding as pet owners increasingly prioritize their pets' health, driven by technological advancements and new medical models [5] - Companies are encouraged to leverage opportunities through innovation, service upgrades, and strategic partnerships to enhance competitiveness and promote sustainable industry growth [6]

Core Insights - The launch of Vet1 by New Ruipeng Group marks a significant breakthrough in the integration of AI technology within the pet medical industry, utilizing millions of clinical data and expert veterinary insights for advanced diagnostic capabilities [1] - The pet medical industry is experiencing a transformation driven by changing consumer demands, with pet owners seeking more specialized and precise medical services for their pets [3][4] Industry Demand Transformation - Increased household income and urbanization have led to pets being viewed as core family members, resulting in a shift from basic healthcare needs to a demand for specialized medical services [3][4] - The demand for precise diagnostics and treatment for complex diseases is surging, with a reported shortage of 300,000 veterinary professionals and inconsistent treatment standards posing challenges to the industry [3][4] Shift from Basic to Precision Medical Care - The pet economy in China is projected to exceed 300 billion yuan in 2024, with medical services being a core growth area driven by pet owners' evolving expectations for comprehensive care [4] - Pet owners are increasingly dissatisfied with basic services and are seeking advanced diagnostic and treatment options for serious health issues, reflecting a significant change in consumer expectations [5] Specialization as a Competitive Advantage - The competitive landscape is intensifying, with specialization in veterinary services becoming crucial for differentiation and establishing technical barriers [5][6] - New Ruipeng is developing a specialized system with 15 departments and investing in advanced equipment to enhance service quality and efficiency in pet healthcare [3][5] Addressing Diverse Needs - The traditional "generalist" approach in veterinary care is inadequate for addressing the unique physiological and behavioral needs of different pet species, leading to the establishment of specialized services [6][8] - Facilities designed specifically for cats and exotic pets are emerging, providing tailored environments and care that alleviate stress and improve the overall treatment experience [6][8] Conclusion - The pet medical industry in China is undergoing a profound transformation driven by upgraded consumer demands and competitive pressures, pushing towards a more specialized and efficient healthcare model for pets [8]