Goldman Sachs: Petpal Pet Nutrition Technology (300673.SZ): US Order Recovery & New Zealand Factory Ramping Up; Growing Domestic While More Investment
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Goldman Sachs held an online meeting with Petpal Pet Nutrition Technology on June 29, 2026. Management expressed confidence in restoring export OEM growth in 2026, driven by recovering US orders, European expansion of roughly 15% year-over-year, and improved order visibility.
The New Zealand factory is ramping up, with second-quarter shipments accelerating significantly. Inventory is targeted to drop from over 60 million yuan last year to below 20 million yuan, reducing related losses by approximately 30 to 40 million yuan. Domestically, proprietary brands grew 15% to 16% year-over-year in the first half of 2026. However, intensified competition and elevated online customer acquisition costs are pressuring profitability, potentially widening domestic losses slightly this year.
Gross margin saw a roughly 1 percentage point decline in the first quarter due to volatile raw material costs, though management targets overall stability for 2026. Tariff expectations have stabilized among US clients since 2025, supporting continued order recovery and inventory replenishment.
Goldman Sachs maintains a Sell rating on the stock with a 12-month target price of 12.70 yuan, representing a potential downside of 4.2% from the current share price of 13.26 yuan. This valuation utilizes a sum-of-the-parts methodology, applying 26 times 2027 estimated price-to-earnings for domestic operations and 16 times 2026 estimated price-to-earnings for overseas business.