I have often seen news in the past two years that a "styling" for pets is more expensive than a haircut for ordinary people, and medical treatment for pets is more expensive than medical treatment for humans. Nowadays, more and more consumers are willing to spend a lot of money on pets. The pet economy is already very mature in foreign markets, but it is still growing rapidly in China.

Many companies are competing in the pet market. Currently, pet food, pet medical care, and pet toys and supplies are the three most popular segments.

As of now, there are at least 7 pet-related listed companies in the A-share market, namely Zhongchong Shares, Petty Shares, and Luce Shares in the pet food track; and Hefeng Shares in the pet medical track. He Ruipu Biology; Yiyi Shares and Yuanfei Pets in the pet supplies track.

They are all segmentation experts in their respective fields.

On November 18, Hangzhou Tianyuan Pet Products Co., Ltd. was listed on the GEM. The stock abbreviation is "Tianyuan Pet" and the stock code is "301335.SZ". The company's current issuance price is 49.98 yuan per share. The total share capital after the initial public offering is 90 million shares, and the number of initial public offering shares is 22.5 million shares. This means that the A-share pet sector is about to add a "new army".

As an early domestic enterprise that entered the pet industry, Tianyuan Pet has developed into a full-category, large-scale pet product supplier in my country after more than ten years of focus and accumulation. Against the background of the rise of the "It Economy", the company is expected to further increase its market share by virtue of its comprehensive strength such as strong R&D capabilities, excellent product quality, and excellent brand building.

Multi-channel coverage at home and abroad

Comprehensive layout of the pet market

The company focuses on the pet industry, with the mission of "making pampering and healthier", focusing on cats Continuously develop multi-category pet products based on the living habits of major pets such as dogs and cats and the interactive needs of human pets, and pay attention to the creative planning and innovative design of new functions, new themes, new materials, and new categories, and have widely realized the need for pets to rest, sleep, and sleep. Effective coverage of multi-scenario usage needs such as activity space, play and travel, clean eating, interaction between people and pets, etc. and full range of products.

As China’s pet industry enters a period of rapid development, the company itself has achieved simultaneous rapid development. From 2019 to the first three quarters of 2022, the company's operating income was 1.049 billion yuan, 1.450 billion yuan, 1.854 billion yuan and 1.509 billion yuan respectively, and the net profits after deducting non-attributed profits were 87.1744 million yuan, 100.3292 million yuan, 96.2866 million yuan and 101.9502 million yuan. It is worth noting that even though the global economy experienced a major impact from the COVID-19 epidemic in 2020, the company's operating performance still maintained growth, demonstrating the company's strong operating resilience.

The technical level of the pet products industry is mainly reflected in the design and development of new products, product intelligence, and product quality management. In order to consolidate and improve its competitiveness in the field of pet products, the company continues to design and develop new products, optimize and update the product structure to enhance customer stickiness. As of June 30, 2022, the company has a total of 290 patented technologies, including 285 domestic patented technologies and 5 foreign patented technologies.

Benefiting from the expansion of the overseas pet products market, the company has established stable cooperative relationships with core customers by relying on its own R&D and manufacturing advantages. It has successfully entered the international pet markets such as the United States, the European Union, Australia, and Japan, and accumulated a number of high-quality products. Downstream customers, such as large supermarket chains such as Walmart, KmartAUS, TRS, Birgma, and KOHNAN in the United States, internationally renowned e-commerce companies such as Amazon and Chewy, and large pet supplies chain enterprises such as Fressnapf and Petco, have all established stable and long-term cooperative relationships.

The company implements a two-wheel drive strategy at home and abroad, and while maintaining competitive advantages in foreign markets, it vigorously develops the domestic market through its own brands. For the domestic market, the company has developed a sales model that emphasizes both online and offline, and has added pet food business to the original pet products to better develop the domestic market and increase customer stickiness.

The domestic pet food industry is experiencing rapid growth. After years of accumulation, the company has advantages in production, research and development, quality control and other aspects. The development of domestic own brands is the general trend. Looking forward to the future, the company will actively explore the domestic pet market and leverage the country's leading e-commerce business model to expand its customer base and increase customer stickiness through the development of its own brand and agency brand pet food businesses, and further promote the synergy between pet products and pet food. Sale.

The path for expansion and growth is clear

Future development demonstrates resilience

With this IPO, Tianyuan Pets plans to raise 590 million yuan for the Huzhou Tianyuan technological transformation and upgrading project, the Hangzhou Hongwang production base construction project, the Tianyuan logistics warehousing center construction project, and the product technology development center. Construction projects, e-commerce and information construction projects. After the project is completed, the company's comprehensive capabilities in production capacity, marketing channels, research and development, etc. will reach a new level.

Among them, the "Huzhou Tianyuan Technical Transformation and Upgrading Project" and the "Hangzhou Hongwang Production Base Construction Project" are designed to solve the production capacity bottleneck problem of the company's existing production base, expand the production scale, create scale effects, and then consolidate And improve the market share of the company's products and the automation and intelligence level of the company's production.

In recent years, the company’s pet product sales revenue has continued to increase. As far as cat climbing frames are concerned, from 2019 to 2021, the company’s cat climbing frame revenue was 240 million yuan, 348 million yuan and 402 million yuan respectively. yuan, with a compound growth rate of 29.52%. Since the production process of cat climbing frame products is relatively complex, the company adopts a production model of mainly independent production and supplemented by outsourced production. From 2019 to the first half of 2022, the company's self-produced proportions of sales revenue from cat climbing frame products were 78.68%, 68.58%, 69.31% and 69.02% respectively.

As the demand for cat climbing frames further increases, the company also has higher requirements for the production capacity of cat climbing frames. After the "Huzhou Tianyuan Technical Transformation and Upgrading Project" is completed, it will add 715,000 sets of cat climbing frame product production capacity, which will help improve the automation and intelligence level of the company's production and further increase the market share of cat climbing frames.

At the same time, with the expansion of the pet products market, the market size of electronic pet products is also gradually expanding, further showing the development trend of digitalization, integration and intelligence. After the "Hangzhou Hongwang Production Base Construction Project" is completed, it will add 1.6 million sets of composite cat climbing frames and 3.93 million sets of electronic pet products.

In the future, the company will expand the production and sales of pet electronic products, especially increasing the production capacity of major products such as electronic pet toys, electronic wearable pet supplies, and electronic pet eating utensils, which will optimize the company's products and income structure to meet the increasingly diversified product needs of domestic and foreign customers for pet products.

With the increase in per capita disposable income and the increasing demand for "spiritual sustenance", the pet industry has the characteristics of high growth and anti-cyclicality, and the industry has large room for growth. According to the "2021 China Pet Industry White Paper", my country's pet consumer market will reach 249 billion yuan in 2021, a year-on-year increase of 20.58%. According to iiMedia Consulting’s forecast, China’s pet economic industry will reach 493.6 billion yuan in 2022, a year-on-year increase of 25.2%, and the market size is expected to reach 811.4 billion yuan in 2025.

Faced with the contemporary opportunities in the domestic pet track, Tianyuan Pet said that the company will expand the production capacity of the company’s cat climbing frames and electronic pet products, and enhance the company’s research and development capabilities and logistics and warehousing levels, making the company It can better develop products in line with customer needs, further enhance the company's supply capacity of all categories of products, increase the company's market share, and consolidate its leading position in the industry, thus promoting the company's all-round development.

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