① Domestic and foreign market demand is good. Combined raw materials are at a low level. The net profit of China Chong Co., Ltd. doubled in 2023, and net profit growth accelerated further in the first quarter of 2024; ② In 2023, the gross margin of China Chong Co., Ltd. was 27.03%, up 6.77 percentage points from the previous year.
Financial Services Association, April 22 (Reporter Xiao Lianghua) In 2023, the pet food products circuit is booming, and superimposed raw materials are at a low level. Zhongchong Co., Ltd. (002891.SZ) doubled its net profit in 2023. In the first quarter of this year, the company's net profit growth further accelerated.
China Chong Co., Ltd. announced on the evening of April 22 that in 2023, the company achieved operating income of about 3,747 billion yuan, an increase of 15.37% over the previous year; net profit attributable to shareholders of listed companies was 233 million yuan, an increase of 120.12% over the previous year. In the first quarter of this year, the company achieved operating income of 888 million yuan, an increase of 24.42% over the previous year; net profit of 56.2243 million yuan, an increase of 259% over the previous year.
“The profit increase of China Pet Products Co., Ltd. is mainly due to the growth of the OEM business. Exports from the domestic pet food products industry have recovered quite a bit this year. Furthermore, the company's own brands have also maintained steady growth at home and abroad.” A pet industry analyst told the Financial Federation reporter.
Pet industry observer Meng Qing also believes that leading companies in the pet food supplies industry, such as China Pet, rely heavily on overseas markets, and overseas demand will increase in 2023. At the same time, the prices of major raw materials such as chicken breast have been low for a long time, and leading companies are developing their OEM business well. Under multiple factors, the company's revenue and profit have increased significantly.
Specifically, in 2023, the company's overseas market revenue increased by about 315 million yuan, significantly exceeding the domestic revenue increase of about 185 million yuan. In terms of categories, the company's pet staple food achieved revenue of about 577 million yuan in 2023, an increase of more than 60% over about 360 million yuan in 2022, accounting for an increase of 11.08% to 15.39%, making it the company's fastest-growing product category.
A CFA reporter noticed that the increase in the company's net profit was far greater than the increase in revenue, and the decline in raw material prices was an important factor. In 2023, the gross margin of Zhongchong Co., Ltd. was 27.03%, an increase of 6.77 percentage points over the previous year. Gaibao Pet (301498.SZ), also a leading company in the pet food industry, had a gross margin of 36.84% in 2023, an increase of 4.25 percentage points over the previous year.
According to data from the Shanghai Steel Union, as the main raw material for pet food, the price of white feather broiler products has continued to drop since the third quarter of last year. The comprehensive price dropped from 12,000 yuan/ton in April last year to less than 9,000 yuan/ton in December.
Affected by the decline in raw material prices, the raw material cost of Zhongchong Co., Ltd. fell from about 1,066 million yuan in 2022 to about 872 million yuan in 2023, and the share of direct material costs in operating costs fell from 42.52% to 33.07%, a year-on-year decrease of 9.45 percentage points.
Looking ahead to 2024, China Pet Co., Ltd. said that the growth of the domestic pet industry has fluctuated recently due to factors such as the epidemic, but the overall growth situation has always been superior to per capita GDP growth, and the industry has strong resilience to risks. Furthermore, it is expected that the proportion of China's elderly population will increase in the future, thereby further increasing the demand for pets in society as a whole and the potential for growth in the size of the pet market.