"Cats and dogs eat better than humans" - under the mentality of "I'd rather suffer myself than let my children suffer," the pet economy continues to heat up. Track companies' performance has repeatedly hit new highs and stock prices have soared, but capital's "reduction feast" has also begun.
On August 6, Yantai China Pet Foods Co.,Ltd. (002891.SZ) disclosed its latest financial report, showing revenue of 2.432 billion yuan in the first half of this year, a year-on-year increase of 24.32%; net profit attributable to shareholders reached 203 million yuan, up 42.56% year-on-year.
**Potential Gains of 270 Million Yuan**
The pet concept is currently one of the few high-growth sectors in the consumer industry. As the second-largest pet food company by scale, Yantai China Pet Foods owns three core brands: WANPY, Toptrees, and ZEAL. The stock price has risen steadily throughout the year, once reaching 74 yuan per share in June, tripling compared to the same period last year.
After the stock price soared, shareholders began planning to "cash out and exit."
In July, Yantai China Pet Foods announced that "Tongyi Chunxiao No. 19 Private Securities Investment Fund," a party acting in concert with controlling shareholder Yantai Zhongxing Biotechnology Co., Ltd., plans to reduce its holdings by no more than 4.56 million shares (all of its holdings) through block trading or centralized auction trading from August 7 to November 6.
According to enterprise information, Yantai Zhongxing is 100% owned by Yantai China Pet Foods' founder Hao Zhongli.
If the transaction proceeds smoothly, the private fund will completely clear its position in Yantai China Pet Foods. Based on a rough calculation using the closing price of 57.44 yuan on August 6, the reduction could yield nearly 270 million yuan in profits.
Looking closely at the financial report, Yantai China Pet Foods' performance continues to maintain high growth momentum, but the shareholders' reduction has raised market concerns.
Currently, Yantai China Pet Foods' most important business segment is pet snacks, generating 1.53 billion yuan in revenue in the first half, accounting for 63% of total revenue. However, growth slowed to 6.37%, below the company's overall rate. The staple food business achieved significant growth this year, with revenue of 783 million yuan, and its proportion increased from 21.56% to 32%.
**Overseas Business Accounts for Over 60%**
Notably, over 60% of Yantai China Pet Foods' revenue comes from overseas business, generating 1.575 billion yuan in the first half of this year, while domestic business revenue was only 857 million yuan.
This is closely related to Yantai China Pet Foods' founding history, as it initially started with overseas contract manufacturing.
In 1998, founder Hao Zhongli leveraged his work experience in the foreign trade industry to capture demand for pet snacks in the Japanese market. He established the company to supply overseas brands, initially using chicken jerky as the main product to establish channels and gradually gain a foothold.
Contract manufacturing business margins were not high. After Yantai China Pet Foods listed on the Shenzhen Stock Exchange in 2017, it strengthened the development of its own brands.
China's pet industry started later than developed overseas countries but developed rapidly, bringing opportunities for domestic brands. Research reports indicate that while the pet food industry currently has low concentration, it has moved beyond the stage of wild growth, with brands like Myfoodie, Lan's, Honest Kitchen, and Crazy Dog emerging in the market.
To strengthen brand recognition, Yantai China Pet Foods has maintained sales expense growth rates of 24%-32% over the past four years. Marketing efforts were further intensified this year, with core brand WANPY signing artist Nana Ouyang as spokesperson. Sales expenses in the first half reached 123 million yuan, up 35% year-on-year, reaching a historical high.
Currently, overseas business remains the core of Yantai China Pet Foods, with North America being its largest sales market. The company revealed its overseas expansion situation during the financial report performance briefing.
In addition to domestic facilities, Yantai China Pet Foods has established factories in the United States, Canada, Mexico, New Zealand, Cambodia, and other regions, with a total of 22 modern production bases globally. More than 10 additional new projects are steadily advancing.
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