Peidi Shares' Report for the Three Quarters of 2024: Profits Surged 630%, and Gross Profit Increased for Seven Consecutive Quarters

On October 23, Peidi shares disclosed the report for the three quarters of 2024. In the first three quarters, the company's cumulative operating income was 1.323 billion yuan, a year-on-year increase of 44.34%; net profit attributable to the parent was 155 million yuan, a year-on-year increase of 630.85%.

Among them, the company achieved operating income of 477 million yuan in the third quarter, a year-on-year increase of 12.61%; and realized net profit attributable to shareholders of listed companies of 57 million yuan, a year-on-year increase of 319.98%. From a single quarter perspective, since the fourth quarter of 2023, Peidi shares' performance has rebounded, and net profit attributable to the parent has doubled for four consecutive quarters!

In the past three quarters, the company has adhered to the "one body and two wings" strategy and continued to innovate, not only achieving a substantial increase in overseas ODM business, but also making breakthrough progress in the construction of its own brand in the domestic market. At the same time, as a leading enterprise in the industry, the company actively fulfills its social responsibilities and is committed to exploring new ways for harmonious coexistence between people and pets and humanistic care, in order to bring more positive impacts to society.

Gross Profit Has Increased for 7 Consecutive Quarters

Data shows that in the first, second and third quarters of this year, the company's operating income and net profit attributable to the parent company have maintained year-on-year and quarter-on-quarter growth, with revenue of 384 million yuan, 461 million yuan and 477 million yuan respectively; net profit was 41.7121 million yuan, 56.2263 million yuan and 56.8560 million yuan respectively, with year-on-year growth rates of 209.56%, 1315.99% and 319.98%.

In fact, starting from the fourth quarter of 2023, the company's profitability began to improve, and the net profit attributable to the parent company in the quarter was 18.07 million yuan, a year-on-year increase of 158.71%.

It is worth noting that the company's gross profit margin has been steadily increasing for 7 consecutive quarters. In the third quarter of 2024, the company's sales gross profit margin reached 30.95%, an increase of 2.93% month-on-month and 12.54% compared with the same period last year. The increase in gross profit margin has led to a significant improvement in the company's overall profitability.

ODM Business Continues to Expand

Since the beginning of this year, the company has had sufficient ODM orders in overseas markets, and has recovered rapidly after getting rid of the fluctuations in 2023, with revenues at a stable level of 350-400 million yuan for several consecutive quarters. As overseas inflation pressure eases, overseas orders gradually pick up, and overseas business revenue will continue to grow.

The company's ODM business orders are mainly delivered by production bases in Vietnam and Cambodia. At present, the company has become one of the largest companies with a complete supply chain layout for chewing gum in Southeast Asia. The capacity utilization and operating efficiency of various bases in Southeast Asia have been significantly improved, especially the smooth release of capacity at the Cambodian base. In the first three quarters of 2024, the revenue of the Cambodian factory increased by nearly 70% year-on-year, and the capacity utilization rate exceeded 90%. It is expected to enter a higher profit track throughout the year.

As for other production bases, the Vietnam base is expected to continue to operate at full capacity, and the New Zealand annual production line of 40,000 tons of high-quality staple food has entered the commercial operation and large-scale production stage, building competitiveness in the high-end pet staple food market.

Strong Growth Is Fully Demonstrated

In the first three quarters of 2024, the company's own brands in the domestic market performed well, and the revenue scale maintained rapid growth, with Jueyan's growth rate reaching more than 50%. Most of the company's own brand products are produced by domestic own factories. With the growth of domestic own brand sales, the factory's capacity utilization rate has increased, driving the improvement of factory-side profitability.

In terms of own brands, the company has detonated the brand strategy by creating best-selling big single products, and continued to promote new products, achieving good performance in the dog snacks, canned food and air-dried staple food tracks. In this year's Double Eleven "First Purchase", the sales of Peidi's brand "Jueyan" on Tmall exceeded 10 million yuan in the first 4 hours before the last payment, and it continued to rank TOP1 on the dog snacks list of various company platforms. The reputation of air-dried staple food users has increased, with a favorable rate of 99%+.

With Jueyan's continuous increase in volume based on explosive single products and the continuous expansion of the product matrix, the company's own brand revenue will continue to grow. At the same time, the company has significant brand power in the field of high-end dog snacks. With the continued development of products such as air-dried food, the product matrix will achieve full coverage from snacks to staple foods, which is expected to continue to drive the brand's continued growth.

Participate in the Establishment of a 300 Million Yuan Pet Industry Fund

At the same time as the financial report was released, the company also issued an announcement on the subscription of pet industry venture capital fund shares. As a limited partner, the company used its own funds to subscribe to the fund shares of Pingyang County Xiaoman Venture Capital Partnership (Limited Partnership) with RMB 120 million, accounting for 40% of the fund shares.

It is worth mentioning that the two-level government funds of Wenzhou and Pingyang City and County in the pet industry fund invested a total of RMB 100 million. Chongqing Vipshop Investment Co., Ltd. and Shanghai Weixiao Project Management Co., Ltd. also subscribed to the fund. The two are related parties of the e-commerce platform Vipshop and the pet brand Weika.

The pet industry fund participating in this participation will mainly focus on investing in high-quality pet industry enterprises in the growth and mature stages, including but not limited to pet food, pet medical and pharmaceuticals, pet supplies, pet services and other fields. While focusing on pet industry investment, the target fund will also be committed to finding high-quality corporate targets in the pet industry nationwide for investment, and actively promote the joint ventures of international pet brands in China.

Contribute Peidi's Wisdom to Sustainable Development

As a leading enterprise in China's pet industry, the company has not only achieved remarkable achievements in business, but also actively fulfilled its corporate social responsibility. From the perspective of pet charity and global sustainable development, the company continues to explore and practice, in order to contribute to the harmonious coexistence of pets, humans and the earth.

In promoting global sustainable development, the company actively practices the ESG concept with firm determination and practical actions. With its outstanding achievements in the field of ESG, it has successfully been shortlisted for the "2024 Global Zhejiang Merchants ESG Classic Case 100". Mr. Chen Zhenbiao, Chairman of Pet Co., Ltd., was also awarded the "2024 ESG Outstanding Zhejiang Merchants". He has shone brightly in the three key aspects of environment, society and corporate governance, and contributed Pet's wisdom to set an excellent example for the industry.

In 2023, the company worked closely with Shell to successfully build the "zero-carbon factory" of the Wenzhou production base. Behind this feat is a series of carefully planned measures: through all-round energy-saving transformation, energy consumption is minimized; decisively promoting all-green electricity substitution and embracing the surging power of clean energy; cleverly using carbon credit offsets to achieve a perfect closed loop of carbon neutrality at the factory operation level. In the end, the Peidi Wenzhou Factory was awarded the "Carbon Neutrality Declaration Certification Statement" issued by SGS, becoming the first zero-carbon digital smart factory in China's pet industry, setting a benchmark for the green transformation of the industry.

In the 32 years since its establishment, the company has always had a high sense of responsibility for society and regards public welfare as an important part of its corporate mission. In January 2024, the company officially launched the "Peidi Campus AAT (Animal Assisted Therapy) Public Welfare Program", like a warm seed of love taking root and sprouting on campus. In 2019, the company also strongly supported Wu Qi (Pet Master) to create a medical dog treatment project, using love and care to open a window of hope for autistic children and add a touch of warmth to their world. In 2020, the company donated 1 million yuan to the Wenzhou Foundation for Caring for the Next Generation for the special plan to rescue star children, showing the company's deep love for special children.

In the future, the company will always adhere to the sacred mission of "promoting the upgrading of pet health standards with global good products", and persevere in practicing the core values of "sunshine, freshness, responsibility, and reliability". With innovation as the wing, it will continue to open up new fields and opportunities; with responsibility as the sail, it will break through the waves and bravely shoulder the responsibilities of the company; with the attitude of a leader, it will bravely move towards a greener, healthier and better future, and strive to realize the grand vision of "becoming an outstanding builder of a harmonious and healthy ecology for people and pets".