From practical needs to emotional storytelling, how will the second half of the pet consumption field unfold?

Guosen released a research report stating that the pet industry focuses on high-quality brand merchants with clear strategies and efficient organizations. The core recommended top quality enterprises leading in the autonomous brand business are Gambol Pet Group (301498.SZ) and Yantai China Pet Foods (002891.SZ). Additionally, they suggest paying attention to other pet-related businesses. Guosen's main points are as follows: Emotional storytelling drives consumption concept advancement, and pet consumption upgrade is underway in China. Currently, the young and knowledgeable pet ownership group in China is rapidly expanding. The concept of pet ownership is gradually advancing from meeting basic survival needs to pursuing health and emotional resonance. In the future, this group will both drive the upgrade of physical consumption such as pet food and accelerate the release of potential in pet medical services, thereby propelling the domestic pet industry into a new development stage. Food: Emotional storytelling reconstructs the scene of people and goods, national brands upgrade and cooperate with new channels, and the strong get stronger Under the new consumption narrative driven by emotions and personification, trust building and professional endorsement are the key points for brands to win consumers' minds and maintain brand momentum. At the same time, the e-commerce channel has entered an era of stock competition and value marketing. The overall operating capabilities of brands will be the decisive factor. Therefore, we believe that although infinite shelves bring unknown factors to the domestic market, the market will ultimately belong to long-termists who have control over the supply chain, continuously invest in research and development, and are good at conveying brand value. The domestic pet food industry may accelerate towards the "good coin drives out bad coin" phase in the second half, and high-quality brand merchants are expected to emerge as winners through the cycle. Medical: Aging of cats and dogs stimulates consumption potential, and chain operation is expected to create a leader 1) Hospital end: The domestic pet medical market is still young, with coverage and single-store turnover significantly lower than mature markets overseas. In the future, driven by scientific pet raising concepts and the aging of pets, the industry has ample room for expansion and profit growth. At the same time, the rate of chain operation in hospitals is currently low and fragmented, and top chain pet hospitals are expected to continue to consolidate market share based on advantages in the supply chain, talents, and technology. (2) Drug end: In the future, the development of pet medical care is expected to simultaneously drive market expansion in upstream drugs. At the same time, core large single-product domestic coverage rates are extremely low for cat triple vaccines, deworming drugs, etc., leaving a significant space for substitution in the future. Currently, the product matrix of domestic top animal protection companies is rapidly improving, and they are expected to continue to challenge imported market share in the future. Supplies: Focus on niche opportunities and brand transformation On the one hand, cat litter, as an essential high-frequency category in supplies, still has long-term potential for capacity expansion and integration in China. New brands represented by Xucuihua, with their mental occupation in the high-end category and empowerment through their own factories and research and development system, are expected to continue their brand momentum, maintaining their leading position and expanding market share. On the other hand, domestic top pet supplies manufacturers are accelerating their transformation, relying on their own brand building and channel distribution capabilities to significantly increase their share in the supplies business. They are also expected to use their own funds and channel accumulation to accelerate the integration or expansion of high-margin brand pet food businesses, thereby expanding their business map, increasing revenue and profits. Risk warning: 1. Food safety risks; 2. Risks of new product promotion falling below expectations; 3. Risks of rising raw material prices; 4. Trade conflict risks; 5. Exchange rate fluctuation risks; 6. Valuation fluctuation risks, etc.