In 2025, pet food company Petpal Tech faced dual pressures from fluctuations in demand for its core overseas markets and investments required for internal strategic transformation.
Full-year operating revenue reached 1.449 billion yuan, a year-on-year decrease of 12.67%; net profit attributable to shareholders of the listed company was 116 million yuan, a year-on-year decline of 36.52%.
The company has long relied on the European and American markets, undertaking orders from brand owners under an Original Design Manufacturer (ODM) model. The combination of inventory destocking by US customers and uncertainty regarding tariff policies has made order demand more cautious, becoming the primary reason for pressure on the revenue side.
However, while revenue faced pressure, the company's gross margin demonstrated certain resilience. In 2025, the comprehensive gross margin of the main business reached 31.86%, an increase of 8.51 percentage points year-on-year.
Behind this were two factors: on one hand, improved operational efficiency at overseas factories in Vietnam and Cambodia optimized production costs; on the other hand, the company adjusted its product structure to increase the proportion of high-value-added products, partially offsetting the negative impact of order contraction.
The decline in profits largely reflected the investment pressure associated with the strategic transition period.
As the main feed production line in New Zealand entered the commercial operation stage, depreciation and amortization increased significantly, driving management expenses up by 17.4% year-on-year. Continued investment in domestic independent brands led to a 13.9% year-on-year increase in R&amp;D expenses, further increasing the short-term performance burden.
From the perspective of business layout, the company's &#34;One Core, Two Wings&#34; strategy continues to advance steadily.
Overseas ODM business is upgrading from single manufacturing to comprehensive service capabilities integrating &#34;R&amp;D + Supply Chain + Manufacturing.&#34; Flexible allocation of overseas bases in Vietnam and Cambodia helps respond to changes in the trade environment.
Regarding domestic independent brands, the &#34;Jueyan&#34; brand maintains a presence on mainstream e-commerce platforms such as Tmall and JD.com, achieving double-digit growth during both the &#34;618&#34; and &#34;Double 11&#34; periods in 2025. Products from the New Zealand main feed production line have completed import filing and are expected to provide product support for subsequent expansion into the domestic market.
The company's annual report also truthfully disclosed several risks currently faced.
A high proportion of revenue comes from core overseas customers; if their procurement strategies change, it will directly affect the company's performance. Fluctuations in raw material prices, exchange rates, and policy and legal risks in global operations are all potential variables affecting operational stability.
In the first quarter of 2026, the company's revenue growth rate turned positive to 6.66%, with revenue reaching 351 million yuan. However, exchange rate factors once again became a key variable eroding profits, causing net profit to plummet by 63.7%.
Additionally, the cultivation of independent brands and the promotion of new products require continuous investment, and market acceptance remains uncertain.
Overall, Petpal Tech is in a transition climbing phase from scale-driven to value-driven growth.
The overseas ODM foundation remains resilient, while domestic independent brands and main feed businesses represent future incremental space. However, effective succession between the two has not yet been established. Uncertainty in the external trade environment and the rigidity of internal transformation investments will continue to test the company's operational flexibility and strategic resolve for some time to come.

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Still Reliant on ODM as the Anchor

OEM Speed Slows, Brand Uptake Lagging, Petpal Tech Enters a Stressful Transition Phase