Pet medical care is the second largest market segment in the pet industry, accounting for about 25%, second only to pet food.

The pet hospital is only a sub-industry of the pet medical sub-industry, and the other two sub-industries are pet drugs and pet vaccines.

Domestic pet hospitals are mainly individual and private, and the quality and level of service are uneven.

According to statistics, there are more than 12,000 pet hospitals in China, but nearly 90% of them are non-chain hospitals.

From the perspective of investment scale, the construction investment scale of domestic pet hospitals is also mainly small and medium-sized, 76.3% of the pet hospital construction scale is less than 2 million, of which 43.8% are less than 1 million;

Pet hospitals with an investment scale of more than 10 million accounted for only 3.2%;

Only 6.69% of the investment scale is between 5 million ~ 9.99 million.

In other words, it means that the "big hospitals" with an investment of more than 5 million only account for 10% of all pet hospitals, almost 1,200 or so, of which most of them are chain pet hospitals.

The main competitor of Pate Pet Hospital is these 1,200 large pet hospitals.

In fact, it should be about 1,100, because Pate Pet Hospital has also opened about 100 pet hospitals in first- and second-tier cities.

The investment specifications are very high, and the first-tier cities and key second-tier cities are all large hospitals with an investment of more than 10 million;

In weak second-tier cities, invest between 5 million ~ 10 million to open small-scale hospitals.

This is also based on science, large cities have large populations, more pets, and developed economies, pet owners are willing to invest more in pets.

As for the third- and fourth-tier cities, they are basically the territory of some small hospitals.

Pate Pet Hospital can't play sinking, because it can't reflect the scale effect, this is the real economy, and the input and output issues must be considered.

The most important thing is that at present, several major competitors of Pate Pet Hospital: Ruipeng, Ruipai, and An'an, the three pet chain hospitals, have all opened more than 100 stores to more than 300 stores, and they are located around first- and second-tier cities.

The battle was very fierce, and Pate Pet Hospital and these opponents were often store-to-store, fighting closely.

Fortunately, Pate Pet Hospital was able to get the online traffic of Pate.com, Investment, Doushi, and Magnesium Group.

Although the number of hospitals is a little worse than that of these three pet chain institutions, the output of a single store is much higher than that of several competitors.

Large pet hospitals can afford higher wages and better veterinarians. Once the scale effect is formed, the small pet hospitals scattered in the third and fourth tier cities are basically the ones that are spread.

Therefore, the battle for the leading pet hospital in China will determine the victory or defeat in the first and second-tier cities.

In addition to finding a way online, Zhang Yida also started the idea of the upstream and downstream of the industrial chain.

He has a bet with Zhang Sanshi of Gaoling Capital, betting that three years later, in June 2019, he will see who controls more assets in the pet industry.

Whoever has more assets will merge and acquire the other.

At the same time, there is an upper limit of $1 billion investment, and the competition is who is more clever and better at operating the pet industry.

If Zhang Yida's side is stronger, Gaoling Capital will naturally obediently accept the merger and become a shareholder of Pate Holdings.

After all, Gaoling Capital is playing finance, whether it is financial investment, or operating on its own, the final goal is to make money.

Three years later, the two sides merged and avoided a lose-lose battle.

I have to say that Boss Zhang Sanshi is a very smart financier, no matter whether the bet wins or loses, he will not suffer.

Zhang Yida is different, he was in the pet industry in his previous life, and his father also wanted to make a big difference in this industry, so the two fathers and sons were naturally unwilling to be financial shareholders.

Pate Pet Hospital started a little slower than several competitors, and has been doing its best to expand, and has only opened more than 100 pet hospitals in the past two years.

It's not that funds are tight, after all, you can take out loans, but it's limited by talent reserves and industry awareness.

After nearly two years of exploration and laying the foundation, Pate Holding Group has basically figured out the doors in the industry.

After discussing with his father, Zhang Yida decided to take a two-pronged approach, one to increase the expansion speed of the hospital, and the other to get involved in the upstream and downstream industrial chain of pet medical care.

Professional pet hospitals carry out the whole industry chain business such as pet disease diagnosis and treatment, prevention and treatment, pet health care, pet grooming, etc., and bundle the sales of pet food and pet health products.

Achieve scale effect, and form a unified operation and standardized management model, and accelerate the promotion of brand effect.

Pet food is produced by Dogfud, a 51%-owned subsidiary of Pate Holdings, but Pate Holdings has little to say about its layout in the two major subdivisions of pet vaccines and pet medicines.

Although Pate Holding Group and Jingda Pharmaceutical Co., Ltd., a subsidiary of Jingda Medical Group, have established a joint venture company, Pate Pharmaceutical, to enter the research and development of pet drugs, but it has not been able to come up with any successful products for a while.

There have been no special laws and regulations for domestic pet medicine, and there is a regulatory gap, so the market is very chaotic.

It has become a common practice for domestic veterinary drug companies to imitate the pharmaceutical products of famous foreign animal protection companies, so that consumers cannot understand the ingredients, or do not indicate the ingredients, and may leave an address, but you can't find it on the map...... There are countless similar examples.

There are also veterinarians who use human medicine as pet medicine, some people can use medicine for pets, and some can't.

If you get it wrong, your dog's life is at risk. Pet hospitals often have some doctor-patient disputes.

Domestic pet drug companies have always presented this state of "small, weak, scattered and gray", and there are very few companies specializing in the production of pet drugs.

In addition, the pet drugs produced are homogeneous, have a high degree of mutual imitation, and are not strong in market competitiveness, which makes it difficult for enterprises to obtain economies of scale.

Without good benefits, we cannot afford the cost and risk of developing innovative drugs.

In addition, there is a lack of professionals in China, and the research and development capacity of new pet drugs is obviously insufficient, which hinders the research and development and innovation of pet drugs.

There are more and more domestic pet owners, and the demand for new pet drugs is increasing day by day, and the supply exceeds demand, which in turn has further led to a large number of domestic veterinary drug companies imitating foreign pet drugs.

In the long run, the production and research and development of domestic pet drugs will enter a vicious circle.

Zhang Qinghua felt this and decided to go to a well-known foreign animal protection company to have a look and learn.

Zoetis, the world's largest manufacturer of pet and livestock drugs and vaccinations owned by Pfizer, Eli Lilly Animal Health, an Fortune 500 company, and Bayer, an animal health brand, ...... and so on for big companies, he went all over again.

However, it is a pity that these companies are very large and have branches and production plants in China, and are reluctant to give mainstream products to Pate Holdings.

That's a little tricky!

Zhang Qinghua had no choice but to change his thinking, turning the agent into an inspection to understand the R&D, production and sales processes of others.

The people of these companies are still very face-saving, because Peite.com and Pete Pet Hospital are their important sales partners in China.

They took Zhang Qinghua and his entourage to visit the laboratory and production workshop, and also arranged a special person to be responsible for the explanation.

People are not afraid of stealing teachers at all, because they are very confident in technology, including you are not afraid of generic drugs.

After some investigation, Zhang Qinghua has a lot of insights.

When he returned to New York, he began to tell his son about the experience.

"Take Zoetis as an example, in the third quarter of 2017, it reported revenue of $1.35 billion and net profit of $298 million.

There are 25 factories and 300 production lines around the world, and the products are exported to more than 100 countries.

There is also a R&D team of thousands of people, all of whom are senior talents.

The company also entered China very early, setting up an office in Beijing in 1995.

Now the Asia-Pacific headquarters is located in the magic capital, there is a R&D center in Beijing, and there are production factories in Ji Province and Xuzhou......"

Zhang Yida nodded with a smile, his father said this, he couldn't be clearer, after all, he did this in his last life.

Zoetis is not well-known, but its parent company, Pfizer, is very famous, and the production company of Viagra has a history of nearly 170 years.

Pfizer was founded in New York in 1849, when China was still in the Daoguang period......

Therefore, in the field of biopharmaceuticals, Chinese companies still have a long way to go.

Hearing his father say that he didn't get the agent qualification, Zhang Yida was not surprised at all.

How sophisticated foreign devils are, the money they can earn by themselves will definitely not be given to you Chinese.

"I heard that Bayer is interested in selling its animal health business?"

Zhang Qinghua said with a smile: "Yes, the person in charge of their American branch heard that I have a son worth $70 billion, and he tried his best to promote their company to me. ”

Zhang Yida scratched his head, "How much is the offer?"

Zhang Qinghua glanced at his son in surprise, "Yes, how do you know? ”

Zhang Yida replied casually: "I guess." ”

In fact, what is the guess, in the middle of 19 years in the previous life, Eli Lilly Animal Protection won the Bayer animal protection department with $5.3 billion in cash and $2.3 billion in stock.

Zhang Yida is engaged in this industry, of course, he remembers the largest M&A deal in the pet medical market in recent years.

The transaction price is not high, and the net profit of Bayer's animal health business for the year is more than 400 million US dollars, and the valuation of 18.8 times P/E ratio is completely reasonable.

Zhang Yida is really a little tempted at this moment.

"When I heard this offer, I didn't dare to talk about it. ”

Zhang Qinghua smiled, "How much is the valuation of our Pate Holding Group?"

Zhang Yida was silent, the pet market is a sunrise industry, swallowing Bayer's animal protection business, with the help of Peter.com and Dogfud's sales network, there is definitely a lot to do!

Seeing that his son was silent and silent, Zhang Qinghua asked, "Don't you really think about acquiring Bayer's animal health business, right?"

"I think we can buy it, so that the business sectors of our pet market will be together, and the puzzle pieces such as pet e-commerce, food, hospitals, and pharmaceuticals will form a pet industry kingdom.

Moreover, the acquisition of Bayer's animal health business can also expand our business network overseas.

In the future, Peter.com and Dogfud pet food can be developed overseas!"

Zhang Qinghua has inspected so many pet pharmaceutical companies, and he is also very envious of other companies.

Of course, it would be nice to be able to buy it and become your own property, but the problem is that you can't afford it?

"You can get $10 billion? Most of your shares are not listed companies, are you going to take out a loan?"

Zhang Yida nodded, "We must use financial leverage, and we don't want so many shares, just hold it, and then pull in a few partners, the actual capital contribution is not much." ”

Zhang Qinghua always feels that it is not appropriate, you have a company with a valuation of more than a billion dollars to acquire a company with a valuation of more than 10 billion dollars, this step is a bit big.

"Let's not wait for two years, wait for the strength of Pate Holdings to be stronger. ”

Zhang Qinghua persuaded, "Besides, the war in your domestic pet hospital has not yet been settled, isn't this distracting your energy everywhere and giving people a chance to break through?"

Zhang Yida did not agree with his father's point of view, explaining: "There is no longer a missed opportunity, and there are very few opportunities to meet the world's top five animal protection companies for sale.

If we win Bayer's animal protection business, the industrial chain will be complete. This opportunity cannot be missed in any way.

As for those pet hospitals in China, a merger and acquisition operation will end the war. ”

Zhang Qinghua was both helpless and relieved when he saw his high-spirited son.

Helplessly, he felt that he was becoming more and more unable to keep up with his son's pace, and the tens of billions of dollars of mergers and acquisitions were so understated in his eyes.

It is gratifying that my son's achievements far exceed his own, and his climb in the business field is close to the top of the world.

Thinking of this, he no longer objected, but repeatedly told him to be cautious about such a sky-high merger and acquisition.