中宠股份：双引擎增长进阶宠物食品龙头；首次给予买入评级

Evolution into pet food leading playerwithdual-engine growth; our new Buy Initiating Coverage:BUY| PO:66.00 CNY| Price:49.93 CNY Initiate Buy rating on China Pet Foods with PO of RMB66Weinitiate on China Pet, a leading player in China’s pet food industry, at Buy with PO of 29 January 2026 RMB66 (32% upside). The company is evolving from a well-established OEM leader intoa dual-engine driven pet food name with rising self-brand. We see a solid 3-year revenueCAGR of >20% with improving margin profile, driven by both self-brand penetration andoverseas capacity ramp-up. Our estimations for revenue/NPAT growth CAGR are23%/25% during 24-27E, which is MSD% above VA consensus on higher topline growth EquityAlice Ma>>Research AnalystMerrill Lynch (Hong Kong)+852 3508 8752 Chen Luo, CFA>>Research AnalystMerrill Lynch (Hong Kong)+852 3508 2009 Self-brand: Swiftly gaining ground as a fast follower We believe the company is positioned to catch up in China’s fast-growing pet foodmarket, supported by rising pet ownership, higher per‑capita spending, and increasingdemand for diversified and premium products among younger consumers. Thoughcompetition remains intense, the company’s smaller scale implies lower direct pressureand meaningful room for market share gains. Its established export track record andproduct quality should further support differentiated domestic positioning aligned with Price49.93 CNYPrice Objective66.00 CNYDate Established29-Jan-2026Investment OpinionB-1-752-Week Range34.40 CNY-74.00 CNY OEM: Resilient trend supported by overseas capacity We view the OEM segment as a resilient earnings buffer, driven by overseas capacityexpansion and solid order visibility. As an early mover in establishing overseas plants, thecompany benefits from proven localized production for global customers. With fullyMrkt Val / Shares Out (mn)2,184 USD / 304.4Market Value (mn)15,198 CNYAverage Daily Value (mn)27.79 USD Free Float47.1%BofA Ticker / ExchangeXDEEF / SHZBloomberg / Reuters002891 CH /002891.SZROE (2025E)18.4%Net Dbt to Eqty (Dec-2024A)23.3%更多一手调研纪要和海外投行研报数据加V：shuimu2026更多 Valuation and risks多一手调研纪要和海外投行研报数据加V：shuimu2026 Our PO is derived from a 50/50 blend of DCF and P/E. We apply 30x 2026E P/E for ourP/E-based valuation, which is 12% lower than its historical average given sector de-rating pressure, and implies 1.2x PEG (vs global pet food peers’2.4x). Risks are raw OEM: Original EquipmentManufacturer VA: visible alphaMSD: mid single digit >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules. Refer to "Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its researchreports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision. Refer to important disclosures on page 46 to 48. Analyst Certification on page 42. PriceObjective Basis/Risk on page 42. iQprofileSMChina Pet Foods (A) Company Description Founded in 1998, China Pet Foods is the leading pet foodmanufacturer in mainland China, supplying clients in US,Japan, EU, and >70 countries and regions. The companynow operates 22 productionfacilities worldwide, producingdry foods, wet foods, treats, and dietary supplements with>1,000 SKUs. It has self-owned brands "Wanpy", "ZEAL" and Investment Rationale We assign a Buy rating to China Pet Foods, given risingmarket needs, self-owned brands expansion and globalcapacity growth. Rising numbers of pets and newconsumption trends create more market space andbenefits China Pet Foods which has multiple price ranges Company at a glance Founded in 1998, China Pet Foods is the leading pet food manufacturer in mainlandChina, supplying clients in US, Japan, EU, and >70 countries and regions. The companynow operattes 22 production facilities worldwide (14 in China and 8 overseas),producing dry foods, wet foods, treats, and dietary supplements. China Pet Foods is also Moreover, the company started to develop its self-brand Wanpy since 1999, and formedsolid self-brand matrix including Wanpy, ZEAL, and Toptrees. As of 2024, Wanpy took2.8% market share and ranked #3 in China pet food market, with major focus on mid- to Valuation Our PO for China Pet Foods is RMB66, derived from a 50/50 blend of P/E and DCFvaluations. The 50/50 blend of P/E and DCF is in line with the valuation methodology forour coverage universe. We believe the P/E valuation could capture short-term P/E-based valuation: RMB62.8 Our P/E-based value is RMB62.8, derived from 30x 2026E EPS. Pet food stocks in Chinamarket historically trade at a premium to the consumer universe, as they are still inexpansion stage, especially for th