DaBomb will increase capital expenditure by nearly 100 million yuan to launch a capacity expansion plan.

DaBomb(6578)Today (27th), the company announced that in order to pursue high value-added products and expand CDMO (commissioned development and manufacturing services) business in the global market, it will increase capital expenditure to expand its annual fermentation production line to 20 metric tons. It is expected to be completed in the second quarter of next year, and its capacity will increase several times. DaBomb will also add another 20 metric ton fermentation tank as early as the second half of next year, which will further increase its capacity.

DaBomb Protein Biotech Corp. held an extraordinary general meeting of shareholders today and passed amendments to certain articles of its articles of association, changing the company's Chinese name to " DaBomb Protein Biotech Corp. Co., Ltd." and its English name to "DABOMB PROTEIN BIOTECH CORPORATION" to meet future operational and development needs.

Liu Yu-fen, Chairperson of DaBomb Protein Biotech Corp. stated that DaBomb Protein Biotech Corp. takes antibiotic alternatives as its core concept and uses post-biotic immune enhancement technology to provide precise solutions for animal health. In the future, the company will continue to launch high value-added products and expand its CDMO business, aiming to establish itself in Taiwan and look to the world, pursuing long-term stable profit growth.

DaBomb also plans to expand capital expenditures, reportedly approaching NT$100 million, to accommodate the capacity expansion of its Taiwan plant. DaBomb stated that the company is currently expanding its existing plant, and the project for a new 20-ton fermentation production line has been contracted out and is expected to be completed in the second quarter of next year, increasing capacity several times over. In addition, DaBomb plans to add another 20-ton fermentation tank as early as the second half of next year, further increasing capacity.

DaBomb stated that its current products are primarily exported, with Southeast Asia accounting for over 60% of revenue. Facing market price competition, DaBomb has recently launched high-value-added products, gradually increasing the proportion of high-margin animal health products. The results of this transformation are already reflected in this year's performance. Although first-half revenue was lower than the same period last year, gross profit increased significantly by 2.4 times to NT$15.64 million. The quarterly gross profit margin also surged from 4.43% in Q1 to 11.54% in Q2. With continued product portfolio optimization in the second half of the year, the gross profit margin is expected to improve further. With animal health product shipments climbing again in Q4, the company is expected to return to profitability in the quarter.

DaBomb announced the launch of two new animal health products, DBT-100 HT and DBT-100 LS, for aquaculture and livestock. These products are based on the functions of probiotics and postbiotics as compiled by the International Society for the Study of Probiotics and Prebiotics (ISAPP). Shipments to these products have begun to the United States to major animal health and nutrition strategy companies. The company is also showcasing the new products to key clients in Southeast Asia through existing channels, pending client evaluation and approval. Furthermore, as DaBomb Protein Biotech Corp. obtains more feed additive import permits in various countries, shipments are expected to increase month by month starting in the fourth quarter.

Liu Yufen stated that the CDMO business has received orders from a large US animal health and nutrition strategy company, a US feed additive developer, and a domestic enzyme research and development company. It will also collaborate with a Singaporean startup that possesses novel antimicrobial active peptide technology, which can meet the company's expanded production capacity over the next two years.

Following its strategy of establishing a foothold in Taiwan and expanding globally, DaBomb Protein Biotech Corp. will close its Zhangzhou plant after completing its phased objectives. All R&D efforts and capacity expansion will now focus on Taiwan. By fully developing its CDMO business, DaBomb aims to expand its overseas markets from Asia to the world, achieving its goal of long-term and stable profit growth.

The above content is excerpted from an in-person report by Xie Baihong, Economic Daily, on September 27, 2023, at 16:46:43.
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