Analysis of New Ruipeng and Ruipai Pet Healthcare Competing for the 'First Stock'

According to the latest information [1][2][3], the Chinese pet healthcare industry is in a critical competitive stage. Ruipai Pet is rushing to become the “First Chinese Pet Healthcare Stock”, while New Ruipeng’s previous listing attempt ended in failure.

The Chinese pet healthcare industry maintains a high growth rate of 15%-20%, but enterprises in the industry generally face profit difficulties. According to CIC data, as of June 2025, the number of pet hospitals nationwide has reached 39,025, nearly doubling from 22,537 four years ago, and market competition is becoming increasingly fierce [2].

New Ruipeng Group was once the largest pet healthcare platform in China. Through large-scale mergers and acquisitions between 2019 and 2022, it rapidly increased the number of hospitals from 388 to 1,891. However, this aggressive expansion has brought serious problems [1][2][3]:

• Financial Performance
  : Cumulative net loss exceeded 3.7 billion yuan from 2020 to 2022
• Gross Margin Plummeted
  : Fell from 30% in 2014 to only about 5% in 2022
• Management Out of Control
  : Overly fast expansion led to talent shortages and continuous decline in single-store profitability
• IPO Failure
  : Forced to withdraw US IPO application in June 2024

After the IPO failure, New Ruipeng had to launch a store optimization strategy. As of 2024, it had closed hundreds of inefficient stores, and founder Peng Yonghe also gradually faded out of daily management [1].

Compared with New Ruipeng’s large-scale expansion, Ruipai Pet has adopted a more restrained expansion strategy [1][2][3]:

• As of June 30, 2025, it has 548 operating pet hospitals (120 self-built, 428 acquired)
• Distributed in about 70 cities across 28 provinces
• Based on 2024 revenue, market share is about 4.8%, reaching 6.3% in high-tier cities
• Became the second-largest pet healthcare service provider in China

• Achieved a net profit of 15.5 million yuan in the first half of 2025, becoming the only national large-chain pet healthcare service provider to achieve net profit
• Gross margin steadily increased from 22.4% in 2022 to 24.8% in the first half of 2025
• Revenue grew from 1.455 billion yuan in 2022 to 1.758 billion yuan in 2024, with a CAGR of about 9.5%

• Broke the industry stereotype that “scale expansion must lead to losses”
• Ranked first in the industry in gross margin in 2024 (22.2%)
• The fastest-growing national large-chain pet healthcare service provider in terms of revenue over the past three years

Although Ruipai Pet has made breakthrough progress, it still faces multiple challenges [1][2][3]:

1. Goodwill Risk
   : As of the end of June 2025, goodwill was as high as 1.792 billion yuan, accounting for 34.6% of total assets, mainly due to continuous M&A expansion

2. Related-Party Transaction Issues
   : There are a large number of related-party transactions with Ruipu Bio, a listed company controlled by actual controller Li Shoujun. In the first half of 2025, procurement amount was 120 million yuan, accounting for 22.5% of total procurement, and the procurement price was 12% higher than the average of third parties

3. Store Closure Pressure
   : Closed 38 hospitals in 2024, far higher than the number of newly added hospitals in the same period (23), and the loss from closed hospitals reached 13 million yuan

4. Intensified Industry Competition
   : A large number of new entrants have led to the diversion of customer traffic, making pet hospital business increasingly difficult

Based on existing data analysis, Ruipai Pet is more likely to be the first to break the loss curse:

• Has achieved profitability for two consecutive reporting periods (second half of 2024 and first half of 2025)
• Leading gross margin level in the industry, maintaining a healthy range of over 20%
• More prudent expansion strategy, avoiding repeating New Ruipeng’s mistakes
• Although related-party transactions exist, a complete industrial chain synergy has been formed

• Profitability has just been achieved; whether it can be sustained remains to be seen
• Goodwill impairment risk may emerge during industry fluctuations
• Internal control issues need further improvement

Ruipai Pet is expected to become the “First Chinese Pet Healthcare Stock”, with its core advantages lying in a prudent expansion strategy and proven profitability. However, the particularity of the pet healthcare industry determines that this track has high profit difficulty — the gross margin of diagnosis and treatment business is only about 20%, far lower than upstream links such as veterinary drugs. Ruipai Pet needs to continue to optimize single-store profitability while controlling goodwill risks brought by M&A to gain long-term recognition in the capital market.

[1] Star View IPO | Ruipai Rushes to Become “First Chinese Pet Healthcare Stock”, New Ruipeng Cries in the Bathroom! (https://view.inews.qq.com/a/20251224A06U9P00)

[2] Ruipai IPO with Goldman Sachs and Mars China as Shareholders: Treating Cats and Dogs Costs Tens of Thousands of Yuan, Why Do Pet Hospitals Always Lose Money? (https://finance.eastmoney.com/a/202512263602843918.html)

[3] Is Running a Pet Hospital Easy? The Answer Is in Ruipai’s Prospectus - 36Kr (https://m.36kr.com/p/3611594421077249)