Another big seller is delisted! Annual sales once exceeded 1 billion

Zhongheng Pet’s listing was terminated.

The Lunar New Year of the Tiger has begun. In the cross-border industry, everyone is ready and working hard, hoping to have a new harvest in 2022. Some sellers are busy looking for the hot sales trends in the new year, and some sellers are busy going public, but are forced to terminate for various reasons.

Zhongheng Pet's listing terminated

Jiangsu Zhongheng Pet Products Co., Ltd. was accepted for IPO on the Growth Enterprise Market at the end of last year . On January 13, Zhongheng Pet applied to withdraw its application for issuance and listing, and its IPO was terminated on January 17. Zhongheng Pet was included in the list of the first batch of IPO on-site inspections announced by the China Securities Association this year, and the termination may be related to this.

Zhongheng Pet's main products are pet hygiene and cleaning products and pet home leisure products . It is understood that Zhongheng Pet's operating business income mainly comes from overseas markets, including developed countries and regions such as North America and Europe , and overseas income accounts for more than 90% .

The sales of products are mainly exported, mainly in the world's well-known e-commerce platforms such as Amazon, Walmart and other comprehensive retailers and retailers and brands specializing in the sale of pet supplies such as PETSMART, CENTRAL GARDEN, CHEWY, PETCO , etc. Among them, the sales revenue from American customers accounts for more than 80% of the main business revenue .

It is understood that during the reporting period, Zhongheng Pet Products mainly focused on business models such as ODM/OEM. The company has established several subsidiaries overseas, among which MPETS is mainly responsible for the market development and promotion of the company's products and brands in Europe, and PWR is mainly engaged in the research and development, production and sales of pet food.

The US subsidiary GPG continued to suffer losses during the reporting period and was deregistered in December 2020. Among them , Li Ze Investment, GGI and APOLLO did not actually carry out operations .

Relevant data show that from 2018 to 2020 and the first half of 2021, Zhongheng Pet's operating income was 856 million yuan , 962 million yuan, 1.068 billion yuan and 550 million yuan respectively, and the net profit attributable to the parent company's shareholders was -2.522 million yuan, 34.1928 million yuan, 94.266 million yuan and 35.4855 million yuan respectively .

Since its establishment, Zhongheng Pet has been engaged in the pet industry, including the design, research and development, production and sales of pet products . Its main products include pet hygiene and cleaning products, pet home leisure products, etc. Focusing on daily activities such as pet hygiene and cleaning, home diet, entertainment and leisure, outdoor travel, etc., it has formed a sales network covering domestic and overseas, online and offline.

In addition to the above-mentioned overseas markets , Zhongheng Pet's domestic market is currently mainly offline sales, and its customers mainly include domestic pet product brands and retailers , as well as the company's self-built sales platform Pet Silver Mall and online stores opened on e-commerce platforms such as Tmall and JD.com.

In order to enhance its market competitiveness, Zhongheng Pet is also continuously increasing its investment in scientific research.

Research investment continues to increase, and the construction of own brands needs to be strengthened

Zhongheng Pet has many competitors in the same industry, including Tianyuan Pet, Yuanfei Pet, etc. In order to increase its competitive advantage, Zhongheng Pet has made efforts in many aspects.

The company has been increasing its investment in scientific research, and its investment in research and development and its proportion have increased year by year. At present, Zhongheng Pet has 26 invention patents , 188 appearance patents and 231 utility patents. At the same time, Zhongheng Pet is also continuously increasing the number of scientific researchers, and the proportion of scientific researchers has also increased.

In addition to increasing investment in scientific research, Zhongheng Pet also pays great attention to the personalization of its products .

For example, the company previously launched pet Bluetooth anti-lost supporting software, which has built-in information on nearly two hundred types of pet dogs and nearly one hundred pet cats. This also makes it convenient to create separate files for pets, and multiple files can be controlled. The various switch colors make it easy for consumers to identify their pets.

In order to open up more international markets, Zhongheng Pet's products also support multiple languages. Its pet chains, ropes, and food utensils are also popular among consumers.

However, while Zhongheng Pet is increasing its competitive advantages, it is also facing many development difficulties.

Among the companies that have gone public in recent years, many pet companies have also emerged. Zhongheng Pet has many competitors in the same industry, and the company's development also faces certain bottlenecks.

Among them, the company's own brand can be regarded as its "weakness", which accounts for a small proportion of total revenue and is not the top business. As the market and consumers pay more and more attention to product innovation, it is increasingly important to continuously strengthen the promotion of own brands. Only by strengthening this aspect can the brand enter a larger market and win more consumers.

In addition, Zhongheng Pets also faces the risk of inventory depreciation losses. According to public information, the company's inventory account balance in the first half of 2021 was 270 million yuan , and the inventory ratio was relatively high. The increase in export tariffs and raw material prices also had a certain impact on the company's export business and market prices.

The company still has a long way to go in terms of opportunities and risks. Although Zhongheng Pet's capitalization has been put on hold, it also reflects the broad development prospects of the pet industry.

Pet economy is heating up, with huge demand in European and American markets

In recent years , more and more young people in China have begun to join the ranks of pet owners. Their passion has driven the pet economy to a blazing high, attracting capital to join this popular track.

Relatively speaking, the pet industry started earlier in developed countries, and all links in the industry chain are relatively mature. The United States is the world's largest pet consumer market, with a large number of pets, high household penetration, high per capita pet consumption expenditure, and strong pet demand.

In 2010, the size of the U.S. pet market was approximately $48.35 billion. In recent years, the size has continued to expand, and pet consumer spending has also been increasing year by year at a relatively stable rate. According to data from the American Pet Products Association (APPA), in 2020, U.S. pet market consumer spending reached $103.6 billion, exceeding $100 billion for the first time, a year-on-year increase of 6.7% over 2019.

In 2019, approximately 84.9 million households in the United States owned pets, accounting for 67% of the total number of households in the country, and this proportion will continue to rise .

The situation in the European pet market is similar. Data from the European Pet Food Industry Federation ( FEDIAF) shows that the total consumption in the European pet market reached 43 billion euros in 2020, an increase of 5.65% compared to 2019. It is mainly divided into pet food, pet supplies and pet services, and sales are all in a state of growth .

The household penetration rate of the European pet market is also high. In 2020, approximately 88 million households in Europe owned pets, with a household penetration rate of approximately 38%. Cats and dogs are still the mainstream of the European pet market.

Asia is an emerging pet market, and although it is not very mature, it has great room for growth and development potential. Among them, Japan accounts for a large proportion, and has maintained an annual growth rate of 1.5%-2% in recent years . On the other hand, China started late, and the penetration rate of pet households is not very high, so the potential is worth exploring.

However, as the market expands and develops, the demand for related products is also undergoing new changes.

Product forms are more diversified , and innovative products emerge in an endless stream ; product appearance design is more home-like , and products that are more integrated with furniture appearance are favored by the market; product functions are developing towards intelligence .

In the past two years, the epidemic has further boosted the global pet economy, and more and more sellers have begun to enter this category. The reason for Zhongheng Pet’s termination is still unknown, but whether it will continue to make efforts in the future remains to be seen. In particular, we would like to remind relevant companies with listing plans to make full preparations.

Termination of listing

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