Main points of investment:
For A-share listed pet products manufacturers, Q2 orders have picked up as the global economic order has gradually recovered, and the resilience of the pet industry has been reflected. The company began to pick up in the second quarter, and Q2 revenue increased by 22.30% compared with the same period last year. The overall asset-liability ratio of the company is not high, and the current / quick ratio is 5.83x4.60 in the first half of the year, so the short-term solvency is relatively strong.
Pet industry multi-drive resonance, "it economy" upwind
The domestic pet industry started late, but developed rapidly. The market scale of pets (dogs, cats) in cities and towns in China from 2011 to 2021 was 27.43% CAGR and reached 270.6 billion yuan in 2022. Per capita income, more than 70 million pet owners, pet emotional value is recognized and other drivers will work together to promote the future development of the pet industry. China's pet penetration rate will be 20% in 2022, and the standard mature market will have room for continued growth in pet penetration and single pet consumption in the future.
Design R & D as the cornerstone, stabilize customer resources and build core competitiveness the company has built a professional, systematic and international pet product design team to meet the needs of customer customization and mass production. In the first half of the year, the company's R & D expenditure rate increased by 0.17pct.
The company has established a good cooperative relationship with the major sales enterprises in the pet industry, and the rich and stable customer resource advantage is a huge driving force for sustainable development and an important embodiment of the company's core competitiveness.
With the simultaneous development of internal and external sales channels, breaking the capacity bottleneck and tamping the development foundation, the product renewal rate of the company is relatively high, driving the unit price up. In 19-22, the average unit price of pet snacks / supplies was 6.64% CAGR 7.67%. The company has a stable customer relationship and will further expand its customers in Japan, Australia and South America in the future. The company's domestic revenue reached 12.38% CAGR in 19-22, an increase of 71.11% in the first half of the year compared with the same period last year. In the future, we will increase the intensity and level of domestic sales, and work together through both online and offline channels to achieve the situation of attaching equal importance to both domestic and foreign sales. After the completion of the three major projects under construction, it will alleviate the capacity bottleneck and expand the advantage of production scale.
Investment rating
In the neutral case, it is expected that the EPS of the company in 23-25 years is 0.68, 0.80 and 0.93 yuan, respectively, and the corresponding 24-year PE valuation is 18 times. With reference to the level of peer valuation, the company is given a 24-year valuation of 22 times PE, with a "overweight" rating for the first time.
Risk hint
The risk brought by the change of Sino-US trade environment; the risk aggravated by market competition; the risk of overseas market operation; the risk of exchange rate fluctuation.