1. Deeply involved in the pet industry for more than ten years, leading the way in pet pulling tools.
The company focuses on R&D, production and sales of pet products and snacks. The main products include pet products such as pet leashes, pet injection toys, etc., as well as pet snacks such as dog bites; among them, the company has an advantage in the field of pet leashes. In 2021, the company achieved revenue of 1,069 million yuan (+75.71% year-on-year) and net profit of 137 million yuan (+64.46% YoY).
2. Pet food products are developing rapidly, and a broad potential market has yet to be developed.
Euromonitor data shows that the global pet food market was $114.942 billion in 2021 (+11.99% year-on-year) and is expected to reach $165.412 billion in 2026 (+6.50% year-on-year); CR5 reached 52.4%, with Mars Nestlé almost an oligopoly. The global pet products market in 2021 was US$44.763 billion (+10.68% year-on-year), and is expected to reach 63.401 billion yuan in 2026; CR5 is only 15.2%, with low market concentration and scattered product structure.
3. Intensive cultivation of pet food products, the steady development of Yuanfei Pet.
The company continued to consolidate its dominant position in pet leashes, selling 387.44 million units in 2021, achieving revenue of 613 million yuan; the release of production capacity in the pet snack sector led to accelerated growth, selling 8344.90 tons in 2021, achieving revenue of 353 million yuan; the pet injection toy company started late, selling 1,554 million pieces in 2021, achieving revenue of 1,10102 million yuan.
4. Profit forecast: The company went public to raise capital to expand the production capacity of pet leashes and pet snacks. Increased production is expected to drive the company's performance growth; the pet injection toy business is expected to maintain relatively stable development. Based on comprehensive considerations, the company is expected to achieve revenue of 1,439/18.21/215 billion yuan in 2022-2024, net profit of 1.81/2,40/304 million yuan, EPS of 1.77/2.35/2.97 yuan/share respectively, and the corresponding PE is 7.8x/5.8x/4.6x respectively, which was covered for the first time, giving an “increase in holdings” rating.
Risk warning: changes in the trade environment, increased market competition, decline in downstream demand, etc.