Boqii $BQ Is Being Watched - What Are We Expecting From The Chinese Pet Company?

After another tedious day on the stock market, sometime before dinner this Tuesday, a strange post appeared on my Chinese brokerage software Futu. It was two mobile taken pictures showing sights of a company’s front desk, from which you could tell that lights were glowing but seats empty. And the author left a one-line description, “Gone?”

It’s not so hard to get the implication if familiar with China’s market. Occurred to me was an incident of OneSmart International Education Group ONE, the Chinese education group that literally vanished several weeks ago.

This time, however, from pictures shown, on the wall behind the front desk was a logo of Boqii BQ, a listed pet company based in China, one I’ve been following since it went public last autumn. What happened?

Before I waste more of your time, just to clarify that I’m aware Boqii is in good shape,  well-operated, especially when it’s now the Double 11 season in China, pet parents waving money to shop at the site. What surprises me is not the conspiracy, but why it appears and who’s behind the scene.

Earlier this week, one breaking news hit global pet markets, that Zooplus, the pet giant in Europe, received a joint offer from private equity groups Hellman & Friedman and EQT. The two sides ended a bidding war and made a joint offer for the pet food retailer that values its equity at €3.7bn.

For those who are new to pet markets, when talking about E-commerce and online retailers, Zooplus, Chewy, and Boqii are great examples to look at in each market. The thing is when hearing about Zooplus, is someone expecting the same to happen to Boqii?

More background: From what I’ve learned on Futu, retail investors in China shared great hope but little patience for Boqii. Feels like Boqii should be some kind of cryptocurrency rather than a boring pet stock (imagine a group of people seeking fortune in China’s  to-be-$30bn pet market, only to realize the only choice is an unprofitable one).

Which became a paradox for both sides: Boqii at current stage would be unlikely to survive a battle against Tmall, JD JD, and PDD PDD if focusing only on profits (neither would Chewy); investors’ disappointment and impatience won’t receive any positive feedback but is actually holding the company’s back.

One thing unarguable, however, is that there are no other companies assigned the same role as Boqii, at least in China’s booming pet industry (Two other listed pet companies in China’s stock market, China Pet Foods, and Petty Group，both focusing on product lines, are more like partners rather than competitors with Boqii). At least for now, there’s no substitute. If we expect another Chewy or Zooplus in China, Boqii is the only chance.

When Thursday morning, the official account of Boqii responded to the “Gone” comment on Futu, saying the pictures involved were taken during off-work hours,   I wasn’t surprised. My concern is, whether the men who took the photos were some went-nasty competitor or a went-nuts investor. Which is worse?

For a long time, retail investors criticized Boqii’s lack of market attention. But signs indicate that it could be the opposite—the company is being watched.