In January 2026, the Chinese animal health industry welcomed a significant transaction.
HISUN Animal Health and Zhongyu Pet Food announced that they will jointly invest to establish a joint venture company for the research, production, and sales of pet prescription food. The new company will have an initial registered capital of 50 million yuan, with a total investment plan exceeding 200 million yuan. HISUN Animal Health will hold a dominant 60% stake, while Zhongyu Pet Food will own the remaining 40%.
This transaction has attracted industry attention in the capital market.
HISUN Animal Health is backed by HISUN Pharmaceutical, with 70 years of pharmaceutical industry experience, while Zhongyu Pet Food is an &#34;invisible champion&#34; in the industry, providing supply chain support behind more than 200 brands.
One is a giant in animal medicine seeking a second growth curve, and the other is a contract manufacturing leader trying to break through in a red ocean. The combination of the two is seen as a typical example of the &#34;food and medicine from the same source&#34; concept being implemented in business.
The core logic of this cooperation lies in the structural changes in the Chinese pet market.
As the first generation of pets enters old age, market demand is shifting from simply being well-fed to more health-oriented needs. Prescription food, as a special category between medicine and ordinary food, has the dual attributes of high-frequency consumption and high technical barriers.
However, this potential market, which could reach hundreds of billions, has long been in a state of supply imbalance, with imported brands holding a monopoly position and domestic brands suffering from a trust crisis.
HISUN provides a rigorous system for drug research and development, while Zhongyu offers mature food manufacturing processes. This &#34;1+1&#34; combination aims to break the existing market pattern. Both parties attempt to redefine local prescription food products in China using &#34;pharmaceutical standards&#34; and &#34;food taste.&#34;
This is a move by Chinese companies into the high-end pet medical niche market.
<h2>Mismatch Between Pet Market Demand and the Billion-Dollar Blue Ocean</h2>
Data reveals that the prescription food market is on the brink of explosion.
The &#34;2025 China Pet Industry White Paper&#34; shows that China’s pets are accelerating into an aging society. Dogs over 7 years old account for 23% of the overall dog population, while the proportion of elderly cats has risen to 11%. This trend is irreversible, leading to a high incidence of various chronic kidney diseases, heart diseases, diabetes, and bone and joint diseases.
For sick pets, the high protein content of ordinary food may become a burden; they require specific nutritional ratios to maintain life, making prescription food a necessity.
For example, for a cat suffering from chronic kidney disease (CKD), ordinary high-quality high-protein meat food can worsen kidney burden and accelerate death; it needs prescription food that is low in phosphorus, low in sodium, and has specially processed protein. For a large dog with severe osteoarthritis, it needs more than just calcium supplementation; it requires a specific nutritional ratio rich in omega-3 fatty acids, glucosamine, and clinically validated ingredients that can reduce inflammation.
Currently, the market supply cannot match this surge in demand.
The domestic prescription food market is about 1 to 1.5 billion yuan, but industry forecasts predict its potential will exceed 10 billion in the coming years, with a significant gap behind it due to extreme supply shortages.
Consumers are facing an awkward situation.
On one side are the shelves dominated by Royal Canin in pet hospitals, and on the other side is Hill's, which struggles to enter China through general trade due to regulatory restrictions. A large amount of demand is forced into gray areas, with &#34;parallel imports&#34; and counterfeit products rampant
Consumers urgently need a convenient, quality-controlled, and scientifically validated alternative product, and the entry of HaiZheng and ZhongYu is precisely aimed at this huge market gap.
<h2>The Inspiration from Hills and the Siege of Royal Canin</h2>
The history of the global prescription pet food market dates back to 1939.
That year, a young blind man, Morris Frank, sought help from Dr. Mark Morris with his guide dog, Buddy, who was suffering from severe kidney failure and was in critical condition. At that time, this was almost a terminal illness.
Dr. Morris believed that a high-protein diet exacerbated the burden on the kidneys, and he developed a special low-salt, low-protein formula food in his kitchen. After consuming this food, Buddy miraculously improved; this German Shepherd not only survived but continued to serve Frank for many years.
This product, born in the kitchen, later became the predecessor of Hills k/d prescription pet food.
This story established the industry benchmark for prescription pet food: it must be based on pathological research and supported by clinical data.
This &#34;evidence-based medicine&#34; gene is key to Hills' dominance globally.
In the Chinese market, Royal Canin chose a different path. Unlike the marketing model of mass consumer goods, Royal Canin does not set up a traditional marketing department but instead established a large technical representative team. These individuals often have veterinary backgrounds and go deep into every animal hospital, not to sell products but to teach doctors about pathology, nutritional support, and case management.
Through this deep and long-term &#34;academic promotion,&#34; Royal Canin has embedded its brand into the diagnostic logic of veterinarians. When a doctor diagnoses a cat with lower urinary tract disease (FLUTD), their first reaction is often to prescribe Royal Canin's urinary prescription food. This reflexive association is Royal Canin's deepest and widest moat.
Domestic manufacturers have previously attempted to break through but mostly returned empty-handed.
The core reason lies in the lack of convincing clinical data; many products merely added functional ingredients without rigorous pathological model validation. This &#34;pseudo-prescription food&#34; has exacerbated distrust among the veterinary community.
<h2>Reconstructing the Business Logic of Food and Medicine</h2>
The collaboration between HaiZheng and ZhongYu attempts to untie this deadlock.
Ji Wei, General Manager of HaiZheng Animal Health, clarified the strategic direction at the press conference, stating that the joint venture will introduce drug clinical trial management standards.
This means that every prescription pet food product will undergo a rigorous process similar to new drug development, using blood biochemical indicators monitoring and double-blind testing with control groups to prove the product's effectiveness with data.
This is the area where pharmaceutical companies excel.
ZhongYu Pet Food is responsible for solving the &#34;unpalatable&#34; issue. Due to restrictions on protein and phosphorus-sodium content, the palatability of prescription pet food is often very poor. ZhongYu's founder, An Zhongping, pointed out that the joint venture will utilize enzymatic technology and flavor release technology to enhance taste without increasing palatants. ZhongYu's accumulation in food processing ensures that the product can be accepted by sick pets over the long term.
Both parties have shown deep binding at the capital level.
HaiZheng Animal Health contributes land, cash, and subsidiary equity, holding 60% of the shares. ZhongYu Pet Food contributes 20 million yuan in cash, and the agreement includes strict non-compete clauses, locking in ZhongYu's core production capacity and technology in the prescription pet food sector
HISUN has filled the gap in industrial manufacturing, and Zhongyu has obtained a ticket to enter the medical-grade market.
<h2>The Standard Controversy and the Victory of Long-termism</h2>
The biggest challenge currently facing China's prescription pet food industry is the lack of standards.
Due to the absence of national standards, the market is mixed. The joint venture project between HISUN and Zhongyu regards the establishment of industry standards as its core mission. Both parties plan to utilize the two-year construction period (2026-2027) to conduct large-scale clinical trials simultaneously while building the factory.
&#34;Slow is fast.&#34;
Compared to the eagerness to make quick money through the OEM model, building factories and clinical validation require significant upfront investment, which is key to constructing a moat. Once a clinical data-based evaluation system is established, newcomers will face extremely high entry barriers.
Leveraging its pharmaceutical background, HISUN plans to collaborate with universities and research institutions to develop localized formulas targeting the high-incidence diseases unique to pets in China, providing full-cycle management from drug treatment to nutritional support.
The market is waiting for a disruptor.
Perhaps when the factory is put into production in 2027, it will mark the beginning of a reshaping of the landscape in China's prescription pet food market

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HISUN Animal Health collaborates with Zhongyu Pet Food to establish a pet prescription food company based on clinical data

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