Analysis of the Impact of Business Model Differences Between New Ruipeng and Ruipai Pet Healthcare on Valuation

China’s pet healthcare industry is in a critical stage of rapid integration and capitalization. As of the end of 2024, the number of pet medical institutions nationwide exceeded 34,000, of which nearly 50% are single or small hospitals, with low industry concentration—top five chains account for only 6.5% of the market share [1]. Against this backdrop, as the two industry giants, the business model choices of New Ruipeng and Ruipai directly determine their respective valuation logic and capital market performance.

Ruipai Pet Hospital Management Co., Ltd. was founded by Dr. Li Shoujun in 2012, and is a pet healthcare platform incubated by Ruipu Bio (300119.SZ). According to CIC statistics, Ruipai is China’s first pet healthcare service provider to achieve national chain operation. As of June 30, 2025, the company has 548 operating pet hospitals, including 120 self-built hospitals and 428 acquired hospitals, distributed in about 70 cities across 28 provinces. Based on 2024 revenue, its market share is about 4.8%, with 6.3% in high-tier cities [1].

New Ruipeng Group’s predecessor was Ruipeng Pet Hospital, which was listed on the NEEQ in 2016. In 2018, it reached a strategic cooperation with Hillhouse Capital, receiving 1.6 billion yuan in investment, and after integrating Hillhouse’s pet hospital resources, it was reorganized into New Ruipeng Group. Through large-scale mergers and acquisitions, it integrated multiple brands such as Ruipeng, Bobitang, An’an, and Meilianzhonghe, and once owned nearly 1900 stores (2022 data), covering the entire system from community clinics to regional central hospitals, specialized hospitals, and even third-party diagnostic centers [2]. Well-known institutions like Tencent and Nestlé have entered successively, forming a ‘rivalry’ with Mars behind Ruipai.

Ruipai adopts a dual-track expansion strategy of ‘parallel self-building and acquisition’ and pioneered the ‘Veterinary Development Partner (VDP) model’. The core feature of this model is that it usually acquires 60% equity when purchasing regional pet hospitals, the original team retains 40% equity, and the original director becomes a ‘veterinary partner’. The headquarters outputs standardized systems and resource support, seeking a balance between control and stability [3]. The advantages of this model are effective integration of local resources, reduction of management friction after acquisition, and maintenance of team stability.

In terms of expansion rhythm, Ruipai is more restrained. From 2022 to 2024, the company acquired 64, 45, and 10 pet hospitals respectively, while opening 29, 31, and 13 self-built pet hospitals in the same period. From 2018 to 2025, the average annual新增门店 was about 35, with a relatively stable expansion speed [4].

New Ruipeng has adopted a more aggressive expansion strategy. From 2019 to 2022, through intensive mergers and acquisitions, it rapidly increased the number of hospitals from 388 to 1891, with a peak of nearly 2000 stores. Its business extended from medical care to beauty, e-commerce retail, training, and other links, building an ecological system covering the entire industry chain [1].

This aggressive expansion brought scale effects but also serious negative consequences. Problems such as management out of control, talent shortage, and continuous decline in single-store profitability followed, leading to a cumulative loss of up to 3.7 billion yuan from 2020 to 2022 [1].

Ruipai’s shareholder structure shows diversified characteristics, including parent company Ruipu Bio, Mars China, Goldman Sachs Group, Yuexiu Industrial Fund, etc. In 2018, it completed a 350 million yuan Series B financing led by华泰 New Industry Fund and Goldman Sachs, and obtained 150 million yuan Series B+ financing from Yuexiu Industrial Fund; in 2021, it introduced 200 million US dollars Series C investment from Mars China [3]. Notably, Mars’ entry brought clear exit schedule pressure to Ruipai, which became an important factor driving this Hong Kong IPO.

In New Ruipeng’s equity structure, Hillhouse Capital and the original management had comparable long-term equity, forming a joint governance pattern. However, as losses intensified, founder Peng Yonghe gradually faded out of daily management, and internal turmoil further affected the company’s development rhythm [1]. This governance dilemma caused by balanced equity became an important reason for its difficulty in quickly adjusting strategies after the IPO failure.

Dimension	Ruipai	New Ruipeng
Expansion Strategy	Steady and restrained, ~35 new stores annually	Aggressive M&A, ~132 new stores annually
Self-built/Acquired Ratio	22% self-built /78% acquired	15% self-built /85% acquired
Management Model	VDP Partner System	Multi-brand Independent Operation
Cost Control	Expense ratio ~16.4%	High expense ratio (specific data not disclosed)
Single-store Profitability	Relatively stable	Continuous decline

According to prospectus data, Ruipai’s revenue grew steadily from 1.455 billion yuan in 2022 to 1.758 billion yuan in 2024, with a compound annual growth rate of about 9.5%. In the first half of 2025, revenue was 943 million yuan, continuing to grow by 8.5% year-on-year [1]. The company emphasizes that it is the fastest-growing institution in terms of revenue among all national large-scale chain pet healthcare service providers in the past three years.

Although New Ruipeng has not publicly disclosed detailed financial data, from its IPO application materials and market feedback, its revenue scale should be far larger than Ruipai (estimated to be 2-3 times that of Ruipai), but its profitability is far inferior to Ruipai. The cumulative net loss from 2020 to 2022 exceeded 3.7 billion yuan, reflecting the heavy financial burden brought by aggressive expansion [4].

Ruipai’s gross margin showed a steady upward trend, rising from 22.4% in 2022 to 24.8% in the first half of 2025, and the company stated that this level ranks first in the industry [1]. In contrast, New Ruipeng’s gross margin is estimated to be around 15%, significantly lower than Ruipai, mainly due to:

1. Cost amortization pressure caused by M&A premiums
2. A large number of inefficient stores pulling down overall gross margin during rapid expansion
3. Operational efficiency losses caused by multi-brand integration

Ruipai turned a profit in the first half of 2025, with a net profit of 15.536 million yuan, becoming the only large-scale chain pet service provider in China to achieve net profit [4]. While New Ruipeng still faces continuous profit pressure during the store optimization process launched after withdrawing its IPO.

Ruipai’s goodwill as of June 30, 2025, reached 1.792 billion yuan, accounting for 34.6% of total assets, and 68.4% of non-current assets based on the latest data [3]. New Ruipeng’s goodwill scale is even larger, but specific data is unknown due to being unlisted. Goodwill impairment risk has become an important negative factor affecting the valuation of both companies.

Ruipai formed a redemption liability of 2.82 billion yuan to meet capital exit needs, further intensifying financial pressure [3]. This liability structure reflects the private capital’s demand for returns and also becomes a practical driving force for promoting the IPO.

After withdrawing its IPO, New Ruipeng closed hundreds of inefficient stores, and the number of stores fell back to about 1400 by 2024 [1]. In contrast, although Ruipai also faced store closure pressure (closing 38 stores in 2024), the overall store quality was more stable.

When Ruipai submitted its prospectus to the Hong Kong Stock Exchange, its valuation story was based on the narrative of ‘steady growth + first profitability’. As the only chain institution in the industry to achieve large-scale profitability, Ruipai tried to prove that the pet healthcare track has a sustainable business model. However, it should be noted that the turnaround in the first half of 2025 occurred more in the window period of accelerated industry reshuffling, and whether the improvement trend can continue remains to be verified [3].

The core reason for New Ruipeng’s withdrawal from the US IPO is that its growth story of ‘scale wins’ is difficult to be recognized in the current market environment. Investors’ doubts about the aggressive M&A model, goodwill impairment risk, and management stability issues have jointly led to a serious shrinkage in valuation. Failure to list successfully also means that it needs to rely on existing shareholders to continue blood transfusion, facing greater survival pressure.

Indicator	Ruipai	New Ruipeng
Price-to-Sales Ratio (P/S)	Expected 3-5 times (IPO valuation)	Significant valuation discount
EV/Revenue	To be determined	High (due to goodwill)
Single-store Valuation	~2-3 million yuan	Significantly lower than Ruipai
Capital Expenditure Efficiency	High	Low

The valuation logic of the capital market for the pet healthcare industry is undergoing profound changes:

1. From Scale to Profit
   : Investors pay more attention to profitability rather than simply the number of stores
2. From M&A to Endogenous Growth
   : Aggressive M&A strategies are no longer regarded as competitive advantages, but instead bring integration risks
3. From Story to Verification
   : Need replicable and verifiable profit models instead of pie-in-the-sky development plans

Ruipai’s first profitability provides support for its valuation, while New Ruipeng’s continuous losses have become the main obstacle to its valuation [4].

1. Intensified Industry Competition
   : As of the end of 2024, the total number of pet hospitals nationwide reached 30,400, and the degree of competition continues to rise
2. Talent Shortage
   : Insufficient supply of professional pet medical talents restricts expansion speed and service quality
3. Regulatory Risk
   : Stricter regulation of the pet healthcare industry leads to increased compliance costs
4. Consumption Downgrade
   : Under economic pressure, pet owners may cut non-essential medical expenses

1. Goodwill Impairment Risk
   : If the acquired hospitals fail to meet performance expectations, the 1.792 billion yuan goodwill will directly erode profits
2. VDP Model Stability
   : Whether the partner system can continue to stimulate team enthusiasm remains to be observed
3. Related Party Transactions
   : Related party transactions with parent company Ruipu Bio may arouse doubts about interest transfer

1. Strategic Adjustment Risk
   : Short-term pain caused by large-scale store optimization
2. Governance Stability
   : Management changes may affect strategic execution
3. Capital Pressure
   : Being unlisted means limited financing channels and greater debt pressure

Based on the current market environment and financial data, there are significant differences in the valuation logic of the two companies:

: If successfully listed, the expected market value may be in the range of 5-8 billion yuan (based on 3-5 times P/S ratio and industry comparable company valuation), corresponding to 4.3-5.6 times 2024 revenue. This valuation level considers:

• Industry status of first profitability
• Relatively steady expansion strategy
• Innovation value of VDP model
• But also reflects goodwill risk and growth pressure

: In the current market environment, even according to conservative estimates, its valuation may shrink by more than 50% compared to the peak. The dividend of the aggressive M&A model has been exhausted, and investors need to see substantial improvements before re-giving a premium.

1. Increased Chain Rate
   : The market share of the top five chains in the industry is expected to increase from the current 6.5% to more than 15%
2. Higher Head Concentration
   : Small and medium-sized institutions are under unprecedented survival pressure, and industry clearing brings M&A opportunities for head enterprises
3. Service Upgrade
   : Extension from basic diagnosis and treatment to specialized medical care and high-end services will increase customer unit price and gross margin
4. Digital Transformation
   : New models such as online consultation and telemedicine may reshape the industry pattern

For investors concerned about the pet healthcare track, it is recommended:

1. Prioritize Ruipai
   : As the first listed company in the industry (if successfully listed), it will obtain liquidity premium and brand effect
2. Be Cautious About Valuation
   : The current market valuation of chain pet healthcare tends to be rational, and it is not advisable to chase high excessively
3. Focus on Profitability
   : Compared with scale, net profit and cash flow better reflect the real value of the enterprise
4. Track Integration Progress
   : The effect of post-M&A integration will be the key factor determining the future valuation of the two companies

The business model differences between New Ruipeng and Ruipai Pet Healthcare deeply reflect the transformation process of China’s pet healthcare industry from barbaric growth to rational development. Through the VDP innovation model and steady expansion strategy, Ruipai achieved first profitability and won recognition from the capital market; while New Ruipeng’s aggressive M&A strategy quickly expanded its scale in the short term, but also brought heavy financial burdens and integration problems, eventually leading to IPO failure.

From the valuation perspective, business model choices directly affect profitability and capital efficiency. Ruipai’s gross margin of more than 22% and first-time turnaround provide support for its valuation; while New Ruipeng’s continuous losses and high goodwill have become the main obstacles to its valuation. With the intensification of industry reshuffling, profitability will become a key indicator determining enterprise valuation, and steady business models will gain more capital favor.

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[1] Tencent News - “Star View IPO | Ruipai Rushes for ‘China’s First Pet Healthcare Stock’, New Ruipeng Cries in the Bathroom!” (https://view.inews.qq.com/a/20241224A06U9P00)
[2] East Money - “2025 China Pet Healthcare Industry Status Report” (https://pdf.dfcfw.com/pdf/H3_AP202507201712315026_1.pdf)
[3] NetEase Finance - “Pet Medical Treatment is More Expensive Than Humans, But ‘China’s First Pet Healthcare Stock’ Doesn’t Make Money” (https://www.163.com/dy/article/KI1Q36NV053990SN.html)
[4] 36Kr - “Is Pet Hospital Easy to Run? The Answer is in Ruipai’s Prospectus” (https://m.36kr.com/p/3611594421077249)