Zhong pet stock (002891): Sales pressure will not change in the epidemic situation

Zhong pet stock (002891): Sales pressure will not change in the epidemic situation

Exploiting the domestic market, the high-growth epidemic in the pet market has impacted the company’s offline channels. It is expected that offline sales will be affected by short-term disruptions. On the online front, the company has cooperated well with e-commerce, and the new retail layout has been effective. SF and other partners continue to operate to help the company’s logistics smooth.

The domestic market is in a blue ocean, the company continues to expand + channels are further improved, high growth pet platform target.

We expect that the company’s 杭州桑拿EPS will be 0 in 2019-21.

52 yuan, 0.

75 yuan and 1.

12 yuan to maintain the “overweight” level.

The offline channels are under pressure, and the online business is gradually recovering from the new crown epidemic, which affects travel. We expect that the company’s offline channels (including pet stores, pet hospitals, etc.) will be affected. In the medium and long term, work will be resumed gradually throughout the country. OfflineSales are expected to resume.

Online business is mainly affected by the obstruction of logistics and express delivery. In order to ensure the normal operation of online business, China Pet chose partners such as SF that operated smoothly during the epidemic. As a result, the company has resumed production on February 10, and the impact of the epidemic has accelerated its disappearance.
Widening channels + global layout to help the company grow, the company is committed to the layout strategy, the establishment of overseas subsidiaries, acquisition and investment of foreign brands, at the same time, the company’s online and offline simultaneous efforts to focus on the layout of new retail platform construction, more rich sales channelsPromote the bargaining power of the company: 1) The online channels have been vigorously developed, and strategic cooperation has been reached with e-commerce giants such as JD.com, Tmall, and Suning. As a result, the company has established online marketing teams such as Nanjing Cloud Cat and actively developed new models on platforms such as Douyin”Real-time delivery” marketing, further enriching marketing strategies; 2) Mature and integrated offline channels, offline bargaining power change, acquisition of Ruipeng Medical, cooperation with pet stores to fully leverage offline advantages; 3) investment in Amoy Pets (Cambodia), In cooperation with Beijing Fangyuan Jinding to establish an industrial fund, and gradually improve the layout of the industrial chain in the future, generating synergies.

The depreciation of the Renminbi has resulted in a significant improvement in overseas earnings. The high expansion has driven the domestic market of high-growth companies. The overseas OEM / ODM sales model is mature, and revenue has grown steadily.

89 and 1: 7.

03), the profitability of overseas business is expected to increase.

Since 2017, the company has vigorously developed domestic business, with “Wanpy”, “Dr.

”,“ China pets ”and other independent brands, the company ‘s sales expenses and R & D expenses will increase on average in 2019. Affected by this, the company’s internal business revenue in 19 is expected to be about 4, which is +59 year-on-year.


The blue ocean market has great growth potential, and we maintain the “overweight” rating. We expect that the company’s EPS will be 0 in 2019-21.

52 yuan, 0.

75 yuan and 1.

12 yuan, with reference to the company’s PE valuation of about 32 times in 2020, taking into account the domestic pet market’s transmission space and high sales growth, we give the company 35-38 times PE in 2020, corresponding to a target price of 26.

25-2苏州桑拿网 8.

50 yuan to maintain the “overweight” level.

Risk warning: intensified competition in overseas markets, fluctuations in raw material prices and exchange rate fluctuations.