CHINA PET FOODS(002891) 中邮证券·2025-01-21 02:48Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company, Zhongchong Co., Ltd. (中宠股份), is expected to achieve a net profit of 360-400 million yuan for 2024, representing a year-on-year growth of 54.4%-71.55% [4][9]. - The company has established a strong foothold in the pet food industry, focusing on its own brands and expanding its overseas business [5][8]. - The domestic business has turned profitable in 2024, with a significant growth potential for its proprietary brands [6]. Company Overview - Zhongchong Co., Ltd. was founded in 1998 and is a leader in the pet food sector in China, offering a wide range of products including dog and cat food, snacks, and health products [5]. - The company has a total market capitalization of 11.7 billion yuan and a current share price of 39.95 yuan [3]. Financial Performance - The company forecasts revenues of 4.427 billion yuan in 2024, with a year-on-year growth rate of 18.13% [11]. - The projected net profit for 2024 is 380 million yuan, reflecting a growth rate of 62.81% compared to the previous year [11]. - The earnings per share (EPS) for 2024 is estimated at 1.29 yuan, with a corresponding price-to-earnings (P/E) ratio of 31 [9][11]. Brand Development - The company has focused on building its proprietary brands, with "Wanpy," "Zeal," and "Toptrees" being the core brands that account for approximately 80% of domestic business [6]. - The brand "Toptrees" has rapidly gained recognition in the mid-to-high-end market since its establishment in 2021 [6]. Overseas Expansion - The company operates 22 modern pet food production bases globally and has expanded its export business to 68 countries and regions [8]. - Plans are in place to build a second factory in the United States, which will add 12,000 tons of production capacity [8].