DaBomb strengthens its animal health product portfolio; overseas shipments jump month-on-month in the fourth quarter of this year.

[ DaBomb fortified animal health products business sees overseas shipments jump month by month in Q4]

Economic Daily reporter Hsieh Po-hung / Instant report

DaBomb a probiotic biointegration engineering company(6578)Today (3rd), it was announced that, in line with its future development vision, the company plans to change its Chinese name from " DaBomb Company" to " DaBomb Protein Biotech Corp. Company". The company will focus on developing the animal health product market in the future. Chairman Liu Yufen said that as the proportion of high value-added animal health products increases, the company will fully launch its animal health product CDMO business in 2024, further expanding its operating scale and expecting simultaneous growth in revenue and profit.

DaBomb today announced its second-quarter financial results, reporting first-half revenue of NT$197 million, a 15.01% year-on-year decrease, and a net loss after tax of NT$24.12 million, a reduction in losses compared to the same period last year. This was attributed to an increased proportion of shipments of high-margin enzyme products in the first half of the year, which boosted the gross margin by 5.94 percentage points to 7.95%, resulting in a significant reduction in operating loss by 43.26%. Furthermore, while DaBomb second-quarter revenue was similar to the first quarter, the gross margin reached 11.54%, a 7.11 percentage point increase from the first quarter, marking a near ten-quarter high. The operating loss also narrowed to NT$8.43 million in the second quarter. This optimized revenue structure led to a significant improvement in the core business performance.

DaBomb stated that the company focuses on the development of high-efficiency animal health protein raw materials and functional additives, with professional microbial fermentation integrated engineering technology as its core. Its product line originally only included functional raw materials such as soybean hydrolyzed peptides and fermented soybean powder produced by solid fermentation technology. In recent years, it has invested in mass production fermentation production line equipment to add liquid fermentation technology to produce functional animal health products such as probiotics and enzymes. It has advantages in technical barriers and product dosage form/formulation design. In the future, in addition to the sustainable operation of the brand, it will also carry out CDMO business of animal health products to expand the company's operating scale.

Liu Yufen stated that with the continued increase in global demand for meat, greater emphasis on food safety, and a surge in the number of companion animals, animal health products play an indispensable role. Animal health products have high added value, are high-priced, high-margin products, and are unaffected by fluctuations in raw material prices. DaBomb 's future focus will be on continuously increasing the shipment volume of animal health products, adding more probiotic strains, developing postbiotic products, and entering the pet health market, aiming to achieve simultaneous growth in revenue and profit.

Liu Yu-fen stated that shipments of enzyme products have already begun to the United States to a large global marketing and animal health and nutrition strategy company. As DaBomb obtains feed additive import permits from more countries, shipments are expected to increase month by month starting in the fourth quarter of this year. In addition, CDMO has received orders from domestic enzyme R&D and design companies, which will begin contributing to revenue before the end of the year. The company has also contacted existing clients in Vietnam, delivering samples of probiotic and enzyme formulations for testing, with shipments expected to begin in the fourth quarter.

The benefits of DaBomb product portfolio optimization are gradually becoming apparent. In the first half of this year, animal health products accounted for approximately 12% of revenue. Even without an overall revenue increase, the gross profit margin has significantly improved. DaBomb anticipates its CDMO business will drive a performance surge next year. To meet the demands of CDMO mass production, DaBomb has invested in a 20KL fermentation production line in recent years. The first phase of expansion, completed by mid-next year, will increase capacity several times over. Another 20KL fermentation tank will be added in the second half of next year, further increasing capacity. Liu Yu-fen has also set short- to medium-term goals for the company after its name change, expecting animal health product revenue to account for 30% of total revenue within three years, and to reach a 1:1 ratio between animal health product revenue and raw material product revenue within five years. With the increasing proportion of high value-added products, profit growth momentum will outperform revenue growth.

Original source: https://money.udn.com/money/story/10871/7344873