First Read China Pet Food Sector: Q226 preview: intensified competition and FX headwinds continue to weigh on earnings

研报英文原文证据摘录

First Read China Pet Food Sector: Q226 preview: intensified competition and FX headwinds continue to weigh on earnings

Global Research

31 July 2026ab

First Read

EquitiesChina Pet Food Sector

Q226 preview: intensified competition and FX Hong Kong

headwinds continue to weigh on earnings Food & Beverage

Nina Jiang

Analyst

nina.jiang@ubs.com

Demand remains resilient but competition continues to erode margins +852-2971 5681

China's pet food market maintained resilient growth in H126 with YTD online GMV up Christine Peng, CFA

HSD% YoY (according to Meritco) despite a challenging macro backdrop, supported by Analyst

stable pet ownership trends and ongoing premiumization demand. However, sector christine-y.peng@ubs.com

earnings remained under pressure as competition intensified across key online channels, +852-2971 7571

leading to higher promotional spending and customer acquisition costs. At the same Steven Dang

time, continued Rmb appreciation resulted in elevated FX-related losses for export- Associate Analyst

oriented players. Consequently, while most listed pet food companies are expected to steven.dang@ubs.com

deliver positive revenue growth in H126, profitability has generally weakened, with +852-3-712 2195

margin pressure emerging as the key theme across the sector.

Q226 earnings preview

Gambol: We expect owned-brand sales to grow 10-20% YoY in Q226, while OEM/

ODM revenue remains broadly flat, resulting in HSD% to mid-teens company-level

revenue growth. We expect net profit to decline by over 20% YoY, mainly due to higher

FX losses and elevated selling expenses amid intensified competition.

China Pet Foods (CPF): We expect domestic sales to grow around 40-50% YoY and

overseas sales by 10% YoY in Q226, implying company-level revenue growth of

approximately 20-25%.