On August 31, Yantai China Pet Foods (known for their brand Wanpy) released their 2020 semi-annual report. The report shows that in the first half of the year, the company achieved operating income of 988 million yuan (US$145M), a year-on-year increase of 25.58%, with a net profit of 46.1162 million yuan, a year-on-year increase of 186.31%.
From the perspective of quarterly revenue, the company achieved operating income of 373 million yuan in the first quarter of 2020, and 616 million yuan in the second quarter, representing year-on-year growth of -2.03% and 51.42%, respectively, and achieved substantial growth in the second quarter.
In terms of products, pet snacks, canned food, and staple foods accounted for 78.13%, 14.07%, and 5.05% of revenue respectively, while the year-on-year growth was 19.51%, 37.35%, and 87.20%, respectively. Pet staple foods achieved substantial growth. According to China Pet Foods’s announcement, the capacity utilization rate of pet dry food will continue to increase in 2020, from 45.6% in Q1 to 76.34% in Q2. The capacity utilization rate in June has exceeded 80%. It is expected that the production line will reach full capacity in the second half of this year.
From the market perspective, domestic and overseas achieved year-on-year growth of 54.90% and 18.53%, respectively, and the domestic market revenue achieved substantial growth. In the first quarter of 2020, the proportion of the domestic market has risen to 24% of total revenue. This is closely related to the company’s active development of the domestic market, and has achieved good results by concentrating resources to continuously consolidate the company’s brand and channel capabilities. On the basis of consolidating foreign markets, China Pet Foods has focused on its own brands “Wanpy and Zeal” as the core, and actively adopts new marketing methods such as new media marketing, variety show naming, and live broadcast to create a multi-level and full-category A matrix of pet food brands.
In terms of capital operation, the company actively promotes non-public issuance of shares. As of the disclosure date of the semi-annual report, the company has obtained the approval of the China Securities Regulatory Commission. After the implementation of this non-public issuance of stocks, China Pet Foods stock will further enhance the company through the construction of a pet dry food project with an annual output of 60,000 tons, a New Zealand project with an annual output of 20,000 tons of pet wet food, the construction of a marketing center and the intelligent upgrade of marketing channels. Comprehensive competitiveness in production, marketing and branding, expand the global strategic layout, and enhance sustainable profitability.
Recently, China Pet Foods stock has moved frequently. On August 19, the “Joint Venture Agreement” was signed with Shanghai Favour Business Co., Ltd. The two parties intend to jointly invest RMB 5 million to establish a joint venture subsidiary. Among them, China Pet Holdings intends to invest 3 million yuan with its own funds. After the completion of this investment, the company holds 60% of the equity of the target company. On August 20, China Pet Co., Ltd. signed a contract with Jingdong billion yuan club to achieve a strong alliance, which will better promote the improvement and development of online channels and help brand online sales. On August 22, the launching ceremony of Tmall Pet’s new and trendy brand strategic cooperation opened at Pet Fair Asia, and the ZEAL brand under China Pet Food was selected. Mr. Hao Zhongli, Chairman of Yantai China Pet Foods Co., Ltd., was invited to attend the launching ceremony and participated in a roundtable interview with Tmall Pet and brand media.
Under the global epidemic situation and the complex and volatile international political and economic situation, China Pet Foods has adopted strict implementation of epidemic prevention and control measures on the one hand, and actively organized the resumption of work and production on the other hand, while strengthening brand building, improving technical levels, optimizing product structure, and continuing to promote The development and launch of new products have enhanced brand influence and competitiveness.