Paws of Prosperity: A-Share Pet Companies See Revenue Soar in First Half of the Year
Source: Consumer Reports Author: Liu Xinge
Young people who pursue cost-effectiveness and order takeout through “Pinhaofan” are willing to spend much more on pets than on themselves. “Although my consumption has been downgraded, my dog’s food has gone from pet store bulk dog food, Bernard Pure to Royal, GO, and Crave. Currently, he eats Lotus, which costs more than 80 yuan per pound,” said a consumer.
As more and more pet owners invest their love and emotions in their pets, this love has leveraged a market worth hundreds of billions of yuan, and has also enabled listed pet companies to achieve good performance growth. According to statistics from Consumer Reports, in the first half of this year, all seven A-share listed companies that mainly engage in pet business achieved positive revenue growth, of which six achieved year-on-year growth of more than double digits; in terms of net profit, except for Lusi Co., Ltd. (832419.BJ), which declined year-on-year, the other six companies all achieved positive growth, with Pety Co., Ltd. (300673.SZ) and Yiyi Co., Ltd. (001206.SZ) increasing by 329.38% and 111.71% respectively.
The rapid development of the domestic pet market is the main reason for the performance growth of many pet-related companies. According to iMedia Research’s “2024-2025 China Pet Industry Operation Status and Consumer Market Monitoring Report” (hereinafter referred to as the “Report”), the scale of China’s pet economy industry is expected to reach 811.4 billion yuan in 2025, of which pet food is 267 billion yuan and pet products is 48.4 billion yuan. It is expected that by 2028, the market size is expected to reach 1.15 trillion yuan.
However, A-share listed companies in the pet business are facing the situation of “big industry, small enterprise”. In the first half of 2024, Guaibao Pet (301498.SZ) and Tianyuan Pet (301335.SZ), the leading companies in the field of pet food and supplies, respectively, had revenues of only 2.427 billion yuan and 1.253 billion yuan. Expanding the popularity and market share of their own brands is still a major challenge for them.
The single economy and the silver economy have driven the rapid development of the pet market. Pet owners regard pets as important family members and are willing to invest more time and money in their pets. Pet consumption has extended from daily feeding and health care to entertainment toys, clothing accessories, beauty, training, etc.
In the first half of this year, except for Lusi Co., Ltd., the revenue and net profit of the other three A-share listed pet food companies all achieved double-digit growth. According to the financial report, Guaibao Pet’s operating income was 2.427 billion yuan, a year-on-year increase of 17.48%, and its net profit attributable to the parent company was 308 million yuan, a year-on-year increase of 49.92%. China Pet Foods (002891.SZ) had an operating income of 1.956 billion yuan, a year-on-year increase of 14.08%, and its net profit attributable to the parent company was 142 million yuan, a year-on-year increase of 48.11%. Due to the poor performance in the same period last year, Pet Foods’ revenue and net profit attributable to the parent company in the first half of this year increased by 71.64% and 329.38%, respectively, to 846 million yuan and 98 million yuan.
Lusi’s performance was slightly worse, with operating income of 351 million yuan in the first half of the year, a slight increase of 3.52% year-on-year; net profit attributable to the parent company was 35 million yuan, a year-on-year decrease of 13.43%. The company said that the reason for the decline in net profit was the construction of its own brand, increased marketing and publicity expenses, and a rapid increase in sales expenses. In addition, overseas projects in Cambodia suffered losses during the construction period.
However, several companies are full of confidence in the market. Pet food is a rigid demand throughout the entire life cycle of pets, and it is also the highest pet-raising expenditure. In particular, as the pet-raising population is getting younger and more educated, the awareness of scientific pet raising is increasing, and the demand for high-quality staple food and diversified pet food is rising, driving the pet food industry to develop in a more refined direction.
The trend of refined and scientific pet raising has also driven up the demand for pet products. Data shows that during this year’s “618” period, the sales of pet smart deodorizers on the Tmall platform increased by more than 330% year-on-year, the sales of pet smart feeders increased by more than 230% year-on-year, the sales of smart cat litter boxes increased by more than 140% year-on-year, and the sales of pet smart drying boxes increased by more than 120% year-on-year. iiMedia Research analysts believe that digitalization and intelligent upgrading have become the development trend of China’s pet products industry.
Listed pet product companies also achieved good performance. In the first half of this year, the revenue and net profit attributable to the parent company of the three A-share listed pet product companies all recorded positive growth. Among them, Tianyuan Pet’s operating income was 1.253 billion yuan, an increase of 24.72% year-on-year, and its net profit attributable to the parent company increased slightly by 2.01%; Yiyi’s revenue and net profit attributable to the parent company increased by 29.31% and 111.71% year-on-year respectively, and Yuanfei Pet’s revenue and net profit attributable to the parent company increased by 26.38% and 12.20% year-on-year respectively.
Domestic brands are rising, Shandong pet food industry is leading
my country is one of the world’s major pet food exporters. Most domestic pet food companies started out as OEMs, and their products are mainly sold to countries and regions such as the United States, the European Union, Japan, and Southeast Asia. In the first half of this year, overseas sales revenue was still the main source of revenue for listed pet food companies. For example, China Pet Foods’ overseas sales revenue was 1.339 billion yuan, accounting for 68.45% of total revenue; Lusi’s overseas revenue was 206 million yuan, accounting for 59.62% of total revenue.
But domestic brands are also on the rise. During this year’s “618” period, domestic and foreign pet brands competed fiercely, and the rankings of domestic listed brands improved. For example, in the Tmall full-stage transaction brand rankings, Mai Fu Di, owned by Guaibao Pet, ranked first in cat, dog snacks and dog staple food brands, and cat staple food ranked in the top 10; Naughty and ZEAL, owned by China Pet Foods, ranked in the top 10 in the cat snacks and dog snacks categories. In the full-stage transaction brand rankings of JD.com, Mai Fu Di ranked in the top 5 in all categories, and Jue Yan, owned by Pety, ranked second in the dog snack category.
The booming domestic pet economy has attracted pet food companies to increase the construction and promotion of their own brands, which has also led to a significant increase in sales expenses. In the first half of this year, due to the increase in revenue from own brands and the increase in the proportion of direct sales channels, the corresponding increase in business promotion expenses and sales service fees, Guaibao Pet’s sales expenses increased by 43.66% year-on-year to 462 million yuan. The sales expenses of China Pet Foods, Petco, and Luce increased by 40.80%, 17.57%, and 79.55%, respectively.
However, compared with imported pet food, domestic brands still need to further win the trust of consumers. Jiang Han, a special researcher at Suning Financial Research Institute and a financial columnist, told the reporter of Consumer Report that in addition to increasing brand building and market promotion efforts and improving brand awareness and reputation, domestic brands should strengthen product quality control to ensure the safety and nutrition of pet food, which is the basis for winning consumer trust; they should also focus on product innovation and differentiated development, and meet the increasingly diverse needs of consumers and enhance market competitiveness by developing new products, new flavors or providing customized services.
It is worth noting that the distribution of my country’s pet industry shows obvious regional characteristics. Most pet product companies are located in Jiangsu and Zhejiang, and most pet food companies are located in Shandong. For example, among the four listed pet food companies, three (Guaibao Pet, China Pet Foods, and Lusi) are in Shandong. In addition, Shandong Shuaike Pet Products Co., Ltd. (hereinafter referred to as “Shuaike Pet”), located in Linyi, Shandong, has started the A-share IPO process in November 2022. If successfully listed, it will become the fourth pet listed company in Shandong.
The abundance of raw materials is the foundation for the development of Shandong’s pet food industry. Chicken and duck are commonly used meat raw materials in pet food. Shandong is a major province for poultry products. Meat food companies such as Jinluo, Delisi, and Longda Meat are all Shandong companies. Yinan County, Linyi City, where Shuai Ke Pet is located, is known as the “No. 1 Meat Duck County in China”, contributing 15%-20% of the country’s annual chicken and duck slaughter volume.
Jiang Han said that Shandong has advantages in raw material supply, production and processing, and technological innovation in the upstream of the pet industry chain, while economically developed provinces such as Guangdong, Jiangsu, and Zhejiang occupy an important position in the pet industry with their complete manufacturing base, logistics system, and market consumption capacity. These provinces also show strong development potential in downstream service areas such as pet medical care, beauty, and training.
Although the pet industry has become a blue ocean market, the market concentration is not high. The total revenue of the seven A-share companies in the first half of the year was less than 10 billion yuan, which can be described as “big industry, small companies”. Jiang Han believes that this is because the market is still in a rapid development stage, the overall market size is expanding rapidly, but the growth rate and market share distribution of companies in the industry are not balanced. Many small and medium-sized enterprises share the market, and no leading enterprise with absolute competitive advantages has yet been formed.
He further pointed out: “The industry is highly competitive. Brand building and market promotion require a long time and a lot of investment, which places high demands on the company’s financial strength, innovation capabilities and market strategies. Some companies may find it difficult to quickly adapt and expand their scale when faced with a rapidly changing market environment. The trend of diversification and personalization of consumer demand has also led to market segmentation. Different companies may focus on specific areas or products, thereby limiting the growth of their overall revenue scale.”