Revenue increased but profits declined in the first quarter; Pure Pet paid a temporary price for its own brand.

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Against the backdrop of accelerated growth in its own brands and synchronized expansion in production capacity investment, GuaiBao Pet is currently experiencing a typical phase of “sacrificing profit for structural optimization.”

In the first quarter, the company achieved operating revenue of 1.644 billion yuan, an increase of 11.08% year-on-year.

However, net profit attributable to shareholders of the listed company was 124 million yuan, a sharp decline of nearly 40% year-on-year, showing a clear pattern of “revenue growth with profit decline.”

In terms of underlying causes, the profit pressure is the result of both external disturbances and internal adjustments.

On one hand, the tariff environment was comparatively loose during the same period last year, resulting in a high base; on the other hand, exchange rate fluctuations turned financial expenses from -6.8 million yuan in the prior year to 18.31 million yuan, with foreign exchange losses significantly enlarged.

Depreciation and amortization from new large-scale production bases, as well as concentrated recognition of share-based payment expenses, have also jointly compressed short-term profits.

But the more crucial variable still lies in the continued increase in expenses.

In the first quarter, the company's selling expenses climbed to 364 million yuan, up 38% year-on-year. The financial report indicated that this increase mainly stemmed from a higher proportion of revenue from own brands and direct sales channels, with corresponding promotional and sales service fees increasing in tandem.

At the same time, with the implementation of performance assessment incentive mechanisms, management expenses grew by 45% year-on-year to 109 million yuan, with overall expenses showing an upward trend in line with structural adjustments.

In recent years, GuaiBao Pet’s strategic focus on its own brands has become increasingly clear.

By 2025, the proportion of company revenue from its own brands will exceed 73%, becoming the unequivocal driving force for growth. Among them, the high-end brand Fuleigat grew by over 80% year-on-year, and the high-end sub-brand under Myfoodie, Bafo, grew by over 60%.

While the premiumization of brands and channel structure upgrades are boosting revenue scale, they have also led to upfront investments in marketing and channel construction, causing expense-side pressure to surface early.

In 2025, the company achieved operating revenue of 6.769 billion yuan, a year-on-year increase of 29%. Net profit attributable to shareholders was 673 million yuan, a year-on-year increase of 7.75%, an increase rate clearly lagging behind revenue growth.

Changes on the asset side further confirm that the company is in an obvious spending expansion cycle.

As of the end of the first quarter, the company’s construction-in-progress balance rose to 254 million yuan, up 331.7% from 58.92 million yuan at the beginning of 2026.

The simultaneous expansion of right-of-use assets and lease liabilities suggests that the company is not only advancing fixed asset construction, but is also accelerating the matching pace of production capacity and supply chain systems by increasing plant leasing.

Although short-term capital expenditure puts pressure on cash flow, it also indicates that the company maintains a relatively optimistic expectation for future order releases and own brand sales growth.

Looking ahead, market concerns may focus on two points: first, whether the ongoing scale-up of own brands can gradually unleash scale effects and improve the expense ratio; and second, whether the rising proportion of high-end products can further elevate gross margins, thus propelling the company from “revenue growth without profit growth” into a stage of simultaneous gains in both revenue and profit quality.

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