June 20, 2025 05:45 PM GMT Global Rates Strategy | Global M Update Government Bond Auctions: The Month Ahead We review the supply, coupon, and redemption picture for the US, UK, Euro, JPY, AUS, NZ, and CAN government bond markets over the next month. This week, G7 net DV01 is expected to be $94.3mn/bp, compared to an average* $72.3mn/bp; US $71.2mn/ bp; Euro $3.4mn/bp; Japan $7.4mn/bp; UK $8.5mn/bp. The Week Ahead: Net issuance (gross issuance less coupons less redemptions) In the euro area, we estimate abo ...

ab 13 June 2025 Global Research First Read China Pet Food May 2025: robust growth in 618 campaign; Douyin Leads, Gambol and CPF continue gaining market share Sustained Strong Growth; Douyin Leads the Pack According to Meritco, online GMV for pet food across Tmall, Douyin, and JD rose by 18% YoY in May 2025, primarily driven by a 22% increase in volume. This was partially offset by a 4.3% decline in average selling price (ASP), attributed to the 618 campaign. Cumulative sales from January to May also grew by ...

M Update Government Bond Auctions: The Month Ahead We review the supply, coupon, and redemption picture for the US, UK, Euro, JPY, AUS, NZ, and CAN government bond markets over the next month. This week, G7 net DV01 is expected to be $109.3mn/bp, compared to an average* $72mn/bp; US $82mn/ bp; Euro $17.1mn/bp; Japan $7mn/bp; UK $1.8mn/bp. The Week Ahead: Net issuance (gross issuance less coupons less redemptions) June 6, 2025 05:38 PM GMT Global Rates Strategy | Global In the euro area, we estimate about €2 ...

Industry Overview - The pet economy has become a hot topic, with significant growth in the pet sector, particularly in pet food, which is expected to continue expanding [1][2] - The pet consumption market is projected to exceed 404.2 billion yuan by 2027, with a compound annual growth rate (CAGR) of 12.6% from 2015 to 2027 [1] - The number of pet dogs and cats in China is expected to reach 124 million by 2024, with a 2.1% increase from 2023 [2] Company Performance - Leading companies like Guai Bao Pet and Zhong Chong Co. have shown remarkable revenue growth, with Guai Bao's revenue increasing from 1.4 billion yuan in 2019 to 3.4 billion yuan in 2022, a CAGR of 34.3% [3] - Zhong Chong Co. reported revenues of 3.248 billion yuan in 2022, with a projected increase to 4.465 billion yuan by 2024, reflecting growth rates of 12.72% and 19.16% respectively [5][6] Market Dynamics - The pet food sector accounts for over 60% of the urban pet consumption market, which is expected to reach 3.012 billion yuan in 2024 [2] - The market is experiencing a "Matthew Effect," where larger companies are gaining market share while smaller firms are struggling, with over 100,000 pet companies disappearing recently [1][10] Competitive Landscape - The top pet food brands are seeing shifts in market share, with Mai Fu Di surpassing Royal Canin in 2022 [4][6] - The CR10 (concentration ratio of the top 10 brands) for the pet food market is 19.96%, indicating a slight increase from the previous year [6] Challenges for Small Enterprises - Many small pet companies are facing significant challenges, with at least 35 companies expected to go bankrupt in 2024 due to financial difficulties [9][10] - The industry is witnessing a trend where brands that fail to innovate or adapt to market changes are being eliminated [10] Future Trends - The aging population is driving pet ownership, with consumers over 50 years old showing a 27% annual increase in spending [3] - New brands are emerging with unique selling propositions, focusing on fresh ingredients and innovative product offerings [11]

行业报告 | 行业研究周报 农林牧渔 证券研究报告 2025 年第 19 周周报：它博会归来，如何看宠物经济发展新趋势？ 1、宠物板块：高景气延续，国产替代与消费升级共筑量价双升 1）它博会看点：①今年关注度再上一层。第五届 TOPS 它博会于本周在上海国家会展中心开幕，展会以超 10 万平展览面积、1200 余家展商、8000+ 品牌缔造行业盛况，折射宠物赛道强劲增长动能。展会首日观众数同比激增 43%，创历史新高，核心数据验证行业扩容。②产品和工艺趋势变化：宠 物主粮精细化趋势显著，分龄分阶喂养成为核心升级方向：幼年期主打高蛋白、原生营养（麦富迪奶弗羊奶肉主粮系列），老年期聚焦肠胃调理、关节 养护（麦富迪老年犬粮）；工艺革新驱动高端化：低温烘焙成军备竞赛焦点（领先烘焙鲜肉猫粮、弗列加特鲜肉烘焙粮），鲜粮/湿粮赛道崛起（ZEAL 新西兰进口主食罐），国产技术迭代创新，行业从"粗放供给"迈向"精准营养+体验升级"新周期；③部分参展公司亮点：外资品牌如皇家、渴望、 爱肯拿，国产头部品牌如麦富迪、鲜朗、蓝氏，以及国产宠物用品公司天元宠物等齐聚展会，其中国产品牌表现较为亮眼——麦富迪它博会以"超级 工厂+天性数据研 ...

行业报告 | 行业研究周报 农林牧渔 证券研究报告 2025 年第 19 周周报：它博会归来，如何看宠物经济发展新趋势？ 1、宠物板块：高景气延续，国产替代与消费升级共筑量价双升 1）它博会看点：①今年关注度再上一层。第五届 TOPS 它博会于本周在上海国家会展中心开幕，展会以超 10 万平展览面积、1200 余家展商、8000+ 品牌缔造行业盛况，折射宠物赛道强劲增长动能。展会首日观众数同比激增 43%，创历史新高，核心数据验证行业扩容。②产品和工艺趋势变化：宠 物主粮精细化趋势显著，分龄分阶喂养成为核心升级方向：幼年期主打高蛋白、原生营养（麦富迪奶弗羊奶肉主粮系列），老年期聚焦肠胃调理、关节 养护（麦富迪老年犬粮）；工艺革新驱动高端化：低温烘焙成军备竞赛焦点（领先烘焙鲜肉猫粮、弗列加特鲜肉烘焙粮），鲜粮/湿粮赛道崛起（ZEAL 新西兰进口主食罐），国产技术迭代创新，行业从"粗放供给"迈向"精准营养+体验升级"新周期；③部分参展公司亮点：外资品牌如皇家、渴望、 爱肯拿，国产头部品牌如麦富迪、鲜朗、蓝氏，以及国产宠物用品公司天元宠物等齐聚展会，其中国产品牌表现较为亮眼——麦富迪它博会以"超级 工厂+天性数据研 ...

Investment Rating - The report maintains an "Increase" rating for the pet food industry, indicating a favorable outlook for the sector's fundamentals and expected performance relative to the market benchmark [3]. Core Insights - The pet food industry is experiencing significant growth, with domestic brands outperforming foreign competitors due to a trend of domestic substitution. Leading domestic brands like Guai Bao Pet and Zhong Chong Co. are showing impressive sales growth and profitability [1]. - Guai Bao Pet's main brand, Mai Fu Di, has maintained the top position on Tmall for five consecutive years, achieving a 150% year-on-year sales increase during the 2024 Double 11 shopping festival. The company reported a revenue of 5.245 billion yuan in 2024, a 21.22% increase year-on-year, with a net profit of 625 million yuan, up 45.68% [1]. - Zhong Chong Co. has developed a strong portfolio of proprietary brands and reported a revenue of 4.465 billion yuan in 2024, a 19.15% increase year-on-year, with a net profit of 394 million yuan, up 68.89% [1]. - Petty Co. also showed strong performance with a revenue of 1.659 billion yuan in 2024, a 17.56% increase year-on-year, and a remarkable net profit growth of 1742.81% [1]. - The report highlights the increasing consumer focus on experience-driven pet care, with new retail formats emerging that combine product offerings with services, catering to the evolving needs of pet owners [2]. Summary by Sections Company Performance - Guai Bao Pet achieved a revenue of 5.245 billion yuan in 2024, with a net profit of 625 million yuan, reflecting a strong growth trajectory [1]. - Zhong Chong Co. reported a revenue of 4.465 billion yuan in 2024, with a net profit of 394 million yuan, showcasing robust brand performance [1]. - Petty Co. reached a revenue of 1.659 billion yuan in 2024, with a net profit increase to 1.82 billion yuan, marking a historic high [1]. Market Trends - The pet food sector is identified as the largest segment within the pet industry, driven by the essential nature of pet care throughout their lifecycle [1]. - The report notes a shift towards high-end market opportunities due to uncertainties in tariffs, which may benefit companies with strong proprietary brands [1]. Investment Opportunities - The report suggests focusing on companies with strong channel strategies and innovative product offerings, such as Tian Yuan Pet and Yi Yi Co., as well as those expanding into smart pet care solutions [3]. - Companies like Guai Bao Pet and Petty Co. are highlighted for their impressive growth in proprietary brand sales, indicating potential investment opportunities [3].

Core Insights - The company reported significant revenue and profit growth for 2024 and Q1 2025, with revenues of 4.47 billion and 1.1 billion yuan, respectively, representing year-on-year increases of 19.2% and 25.4% [1] - The net profit attributable to shareholders for 2024 and Q1 2025 was 390 million and 90 million yuan, respectively, showing year-on-year growth of 68.9% and 62.1% [1] Revenue Growth - The company's main grain product revenue surged by 92% in 2024, increasing its share of total revenue by 9 percentage points to 25% [2] - Domestic revenue reached 1.4 billion yuan in 2024, up 30% year-on-year, while overseas revenue was 3.1 billion yuan, reflecting a 15% increase [2] Profitability Improvement - The company's gross margin improved by 2 percentage points to 28% in 2024, further rising to 32% in Q1 2025, driven by optimized product structure and lower raw material prices [2] Brand Development and Market Expansion - The company has established a three-brand matrix for domestic market growth, with key products including the "Wanpi Xiaojin Dung" series, leading baked grain products, ZEAL dried food, and staple canned food [2] - The company is actively expanding its overseas presence, with products sold in 73 countries and significant growth in European customers; North American market demand is high, with expansions of factories in the U.S. and Canada expected to be completed in 2026 and the second half of 2025, respectively [2] Marketing Strategy - The company has a clear marketing strategy for its three main brands, utilizing diverse channels such as influencer marketing, social media, and partnerships with national media to enhance brand recognition [3] - Sales expense ratios for 2024 and Q1 2025 were 11.1% and 11.4%, respectively, reflecting increases of 0.8 percentage points and 1 percentage point year-on-year [3] Future Projections - Revenue projections for 2025-2027 are 5.34 billion, 6.458 billion, and 7.68 billion yuan, with net profits of 452 million, 595 million, and 710 million yuan, respectively, corresponding to P/E ratios of 37.74, 28.66, and 24.02 [3]

Investment Rating - The report upgrades the investment rating of the company to "Strong Buy" [1][7]. Core Views - The company has shown significant revenue and net profit growth in Q1 2025, with revenue increasing by 25.4% and net profit by 62.1% year-on-year. The domestic brand momentum is on the rise, particularly with the "Wang Pi Xiao Jin Dun" high-fresh meat cat food, which is expected to gain market share in the mid-to-high-end cat food segment [1][6][7]. - The overseas factories have sufficient orders, and the second phase of production in Canada and the United States is expected to support North American demand, further enhancing the global supply chain layout [1][7]. - The company is expected to maintain good profitability due to low-cost structures and high capacity utilization in overseas factories, despite a slight increase in expenses due to higher marketing investments [1][6][7]. Financial Performance Summary - In 2024, the company achieved a revenue of 4.465 billion, a year-on-year increase of 19.1%, and a net profit of 394 million, up 68.9% year-on-year. The fourth quarter of 2024 saw a revenue of 1.276 billion, a 23.3% increase year-on-year, and a net profit of 112 million, up 98.2% year-on-year [6][9]. - The company's gross margin improved by 1.9 percentage points year-on-year in 2024, driven by a higher proportion of high-margin staple food products and structural optimization [6][9]. - For Q1 2025, the company reported a gross margin of 31.9%, an increase of 4.0 percentage points year-on-year, with a net profit margin of 8.3%, up 1.9 percentage points year-on-year [6][9]. Earnings Forecast - The earnings per share (EPS) estimates for 2025 and 2026 have been raised to 1.59 and 1.88 yuan, respectively, with a corresponding price-to-earnings (PE) ratio of 34x for 2025 [1][7][8]. - The company is expected to maintain a high single-digit profit margin throughout the year, benefiting from the acceleration of domestic brand market share [1][7]. Market Position and Shareholder Information - The company has a total market capitalization of 15.8 billion yuan, with a return on equity (ROE) of 16.8% and a debt-to-asset ratio of 40% [2][6]. - The major shareholder is Yantai Zhongxing Biotechnology Co., Ltd., holding a 24.8% stake in the company [2].

Financial Performance - In 2024, the company achieved a revenue of 4.465 billion CNY, a year-on-year increase of 19.15% [2] - The net profit attributable to shareholders for 2024 was 0.689 billion CNY, reflecting a growth of 3.94% [2] - For Q1 2025, revenue reached 1.101 billion CNY, up 25.41% year-on-year [2] - The net profit attributable to shareholders in Q1 2025 was 0.162 billion CNY, a significant increase of 62.13% [2] Product Performance - Pet snacks generated a revenue of 3.132 billion CNY in 2024, with a gross margin of 27.56%, accounting for 70.16% of total revenue [2] - Pet food revenue was 1.107 billion CNY, showing a remarkable growth of 91.85% with a gross margin of 34.59% [2] - The OEM business revenue was 2.616 billion CNY, up 21.21%, with a gross margin of 27.32%, representing 58.59% of total revenue [3] Regional Performance - Overseas revenue for 2024 was 3.050 billion CNY, a year-on-year increase of 14.62%, with a gross margin of 24.90%, making up 68.33% of total revenue [3] - Domestic revenue reached 1.414 billion CNY, growing by 30.26% with a gross margin of 35.18%, accounting for 31.67% of total revenue [3] Supply Chain and Production - The company operates modern production bases across multiple countries, including China, the USA, Canada, New Zealand, and Cambodia, covering all pet food categories [5] - In 2024, the company plans to expand its supply chain with new projects in North America and domestic industrial parks [5] Brand Development - The company expanded its overseas market presence, entering 9 new countries in 2024, bringing the total to 73 countries [6] - The WANPY brand underwent a strategic upgrade in 2024, enhancing brand recognition and consumer loyalty [7] - The WANPY brand launched new products, including the "Golden Shield" fresh meat food, which has received positive market feedback [8] Future Outlook - The company aims to focus on brand building, domestic market growth, and overseas expansion while maintaining a commitment to high-quality development [10] - The domestic pet food market is expected to continue growing, driven by increasing consumer demand for quality [10] - The company plans to enhance its marketing strategies to ensure efficient resource allocation and maximize value creation [11]