image credit: Bamboo Works
Key Takeaways:
Fubei has filed to list in Hong Kong, reporting its profit fell 40% last year as its own-brand business contracted
The pet food maker agreed to distribute a 100 million yuan dividend to shareholders prior to filing its listing application
China's economy may be slowing, but that hasn't dampened the craze for pets, whose owners are happy to spend lavishly on furry friends that are often treated the same as family members. Riding that sentiment, pet food maker Fubei (Shanghai) Co. Ltd. last week filed to list in Hong Kong, hoping to sell investors on its pet-friendly story. While its business is a relative novelty for Hong Kong investors, several of its peers are already listed across the border on the Shanghai and Shenzhen stock exchanges targeting domestic investors.
This isn't the first time Fubei has sat up and begged investors for cash. It applied for a Shanghai listing in 2021, but withdrew the application two years later, citing uncertainties over the listing timetable and adjustments to its future development strategy. While its IPO lay dormant, rivals such as Gambol Pet (301498.SZ) made their own IPO leaps with less trouble. They joined a kennel of other rivals like China Pet Foods (002891.SZ) and Petpal Pet Nutrition (300673.SZ) that listed as early as 2017 and used their new funds to aggressively expand, leaving Fubei trailing behind.
Fubei traces its origins back to 2005, when founder Wang Yingchun opened a pet food factory in Shanghai. The company launched its Bi Le brand two years later. China's pet food market certainly has strong growth potential. It was worth 108.4 billion yuan ($16 billion) last year, and is expected to grow 10.4% annually over the next five years, according to third-party market data in Fubei's listing document. But competition is also quite intense, with many players chasing the same group of pet owners. Reflecting that, the top 10 pet food brands account for just 22.1% of the ...
