Empowered by supply chain advantages and more "green" development, Tianyuan Pet's revenue in 2023 will exceed 2 billion yuan

On April 23, Tianyuan Pet (301335. SZ) released its 2023 annual report, and the company achieved operating income of 2.037 billion yuan, a year-on-year increase of 7.96%, and a net profit attributable to the parent company of 76.7671 million yuan.

According to public information, since its inception in 2003, Tian Yuan Pet has been focusing on the pet industry, and has now developed into a full-category, large-scale comprehensive pet product provider in China, with products covering pet bedding, cat climbing frames, pet food, pet toys, pet clothing, electronic products and other series, all categories of pet products.

With the continuous rise of people's living standards in the mainland, the scale of the pet consumption industry has been expanding in recent years. According to relevant reports, the size of China's urban pet (dog and cat) consumption market in 2023 will be 279.3 billion yuan. Under the rapid development of "it economy", Tianyuan Pet has gradually formed its own competitive advantages and barriers.

Consumer demand rose, and revenue maintained steady growth

The pet industry refers to all fields related to pets, and its subdivisions include pet food, pet medical care, pet training, pet breeding, pet supplies, pet grooming, pet insurance, and so on. Tianyuan Pet is based on the design, development, production and sales of pet products, and actively expands the pet food sales business.

From the perspective of revenue composition, Tian Yuan Pet's overseas sales revenue in 2023 will be 1.125 billion yuan, accounting for 55.25%, and domestic sales revenue will be 912 million yuan, accounting for 44.75%. Among them, the domestic sales revenue increased significantly, with a year-on-year increase of 30.37%.

Silver Persimmon Finance noted that in 2023, the company's pet supplies revenue will reach 1.330 billion yuan, and pet food revenue will reach 688 million yuan, a year-on-year increase of 33.80%. "In the field of pet food, the company mainly sells internationally renowned pet food brand products through import authorization for the domestic market, as well as sells its own brand pet food. Tian Yuan Pet's financial report introduced.

Behind these data growth is related to the rising demand under the rapid development of the pet industry. In terms of international markets, according to Euromonitor, the global pet goods market (excluding services) was valued at $171.1 billion in 2022. The global retail scale of pet products was 47.7 billion US dollars, maintaining steady growth. With the increase in pet owners' attention to pet emotions and other aspects, the pet products industry will continue to grow.

As for the domestic market, although the pet market started late, it has also shown a rapid development speed after 2010. At present, the families of pets in the mainland have a certain scale, and the pets are mainly dogs and cats. According to the 2023 White Paper on China's Pet Industry, there will be 75.1 million urban pet (dog and cat) owners in 2023, an increase of 6.6% over 2022, and the size of China's urban pet (dog and cat) consumer market will be 279.3 billion yuan, an increase of 3.2% over 2022.

It is worth mentioning that the company also pays attention to the continuous development of multi-category pet products around the living habits of cats, dogs and other major pets and the interaction needs of humans and pets, and constantly improves the product line layout.

The financial report also shows that after nearly 20 years of accumulation and development, Tianyuan Pet has sales channels and customer resources for the global market. The company's cooperative customers are widely distributed in Europe, North America, Oceania and other major developed regions, including a number of internationally renowned large-scale chain supermarkets, professional pet product chain enterprises and e-commerce enterprises. This also provides an important guarantee for Tian Yuan Pet's in-transit orders and revenue.

Respond to challenges with supply chain management and quality control advantages

In addition to the growth of market demand, the development of Tianyuan Pet is inseparable from its own competitiveness.

Compared with other industries, pet products have the characteristics of many categories, diverse styles and low degree of standardization, and customer orders generally show the characteristics of more product numbers and higher procurement frequency, which poses a great challenge to the supplier's production organization and supply capacity in terms of reliability, timeliness and diversity.

According to the financial report, in the procurement model, the company's self-produced cat climbing frame, pet bed, pet clothing, electronic pet supplies and other raw materials mainly include fabrics, plates, sisal, PP cotton, paper tubes, ABS engineering plastics, PP particles, etc., the company adopts the "sales and production" method of production, and according to the "production and procurement" based on the way of raw and auxiliary materials procurement.

That is to say, after the production department receives the product order from the sales department, it generates a production notice, and the procurement department calculates the quantity of raw materials required according to the production notice and generates a raw material procurement plan, and organizes the procurement from qualified suppliers in combination with the inventory situation and the raw material market situation. For daily consumables such as pet food and cat litter, the company directly purchases from relevant suppliers and sells them to the outside world.

"In the process of years of exploration, the company has gradually formed an efficient and reliable supply chain management system for multi-category products, which meets the one-stop and multi-frequency purchase needs of customers. Tian Yuan Pet said in its 2023 financial report that the company has established a supplier access and management system based on strict selection, process inspection, and continuous assessment to ensure the reliable, stable and timely supply of many categories of pet products.

For example, the company's supply chain center is responsible for the division of labor and coordination of internal and external production, the procurement management of raw and auxiliary materials and outsourced finished products, the selection and assessment of suppliers, and the warehousing and delivery of products.

In terms of product development, Tianyuan Pet has formed the advantage of rapid response and development of multi-category products. In view of the general retailers, professional chain enterprises and online e-commerce enterprises and other downstream customers who sell pet products, such as general prefers to carry out one-stop, multi-frequency and multi-category product procurement, the company has gradually established the design and development capabilities that basically cover the whole category of pet products.

The financial report mentioned that the company focuses on product development and design transformation from new functions, new themes, new materials, new categories, etc., so as to achieve rapid response to customer needs and market trends. After development and accumulation, the company has established a product development team covering a wide range of categories and fast market response, and the product development is divided into nine product categories, such as pet bedding, climbing frame, toys, clothing, traction, cleaning, electronics, suits and others, and has basically achieved comprehensive coverage of all kinds of pet products.

For 2024, Tian Yuan Pet will focus on the implementation of the key customer strategy, improve the business ability of cross-border e-commerce and build a "pet hair" platform in line with the basic business policy of "strategy-driven, customer-centric, and value creator-oriented".

Released the ESG report for the first time and adhered to sustainable development

Along with the release of the 2023 financial report, Tian Yuan Pet also released a "2023 Environmental, Social and Governance (ESG) Report". In recent years, while the pet industry has shown great potential for development, the exploration of its long-term sustainable development path has also become the focus of attention.

"For a long time, we have insisted on practicing responsibility, integrating pet love into the core of corporate culture, and creating a pet-friendly enterprise full of warmth. Xue Yuanchao, chairman of Tianyuan Pet, believes in his speech in the report that in order to continue to win capital support and market trust in the future, ESG practice management, capacity building and information disclosure will become compulsory courses.

This is also the first time that Tian Yuan Pet has released an ESG report. According to the report, the company's total assets in 2023 will reach 2.570 billion yuan, the total tax payment for the year will reach 72.1632 million yuan, and the R&D investment will be 23.9595 million yuan, a year-on-year increase of 26.55%.

In terms of products, Tianyuan Pet will continue to upgrade and iterate on the original products in 2023 to create products that are more interactive and interesting, more intelligent, more convenient, and more environmentally friendly, with 29 new authorized patents in the year. At the same time, the company actively improves the service ecology, independently develops a one-stop service platform "pet hair" platform, and is committed to integrating the upstream and downstream resources of the pet industry belt, so that high-quality pet products can benefit more people.

In terms of green ecological protection, Tian Yuan Pet actively responds to the call of the country for green and low-carbon development, runs the green ecological concept through the whole life cycle of products, promotes energy consumption and energy efficiency management, increases the proportion of clean energy use, optimizes resource utilization, and minimizes the environmental impact of business operations. In 2023, the company will achieve 100% compliance with the emission standards of the "three wastes", and successfully achieve the annual energy and water consumption target, with a greenhouse gas emission intensity of 1.07 tons of carbon dioxide equivalent per million yuan of revenue, a reduction of 19.19% per million yuan of revenue, and an increase of 330,000 kWh of annual photovoltaic power generation, equivalent to a reduction of 188.20 tons of carbon dioxide equivalent in greenhouse gas emissions, contributing to the construction of a resource-saving and environment-friendly society.

In terms of corporate governance, Tian Yuan Pet is guided by the strategic direction, deepens the transformation and upgrading of the enterprise, and creates a stable and sustainable governance ecology. At present, the company has formed a four-stage ten-year development vision plan of "1.0 business operation, 2.0 brand operation, 3.0 platform operation, and 4.0 ecological operation", formulated a three-in-one, interlocking and interlocking development driving model of "market power, product power, and organizational power", deepened the transformation of digital intelligence, improved the quality and efficiency of operations, expanded diversified cooperation, and drove the company's high-quality development.

Silver Persimmon Finance also noticed that in order to stimulate the vitality of talents, the company has invested significantly in employee training. In order to build a systematic talent training model, Tianyuan Pet has set up a talent training platform of "Chunhui Academy" to establish a talent training system covering the training and development of employees at all levels of the company, and comprehensively improve the comprehensive ability of employees. In 2023, the company's total employee training expenditure will be 3.17 million yuan, the total number of annual training will be 1,876, the total number of hours will be 11,500 hours, and the training coverage rate will be 100%.

Xue Yuanchao said that as a pioneer in the pet products industry, Tian Yuan Pet has rooted the ESG concept in the context of enterprise development, leading the company to move towards higher quality and more sustainability.