DaBomb Launches Global CDMO Business to Seize Precision Animal Health Opportunities

By Du Huirong / Taipei Report 2023.08.03

DaBomb (6578) is targeting the precision animal health market! On the 3rd, the board of directors approved changing the company name to " DaBomb Protein Biotech Corp. ", and an extraordinary shareholders' meeting is scheduled for September 27th to amend the company's articles of association. Chairman Liu Yu-fen stated that the company will fully launch its CDMO global order-taking business, striving to increase the revenue share of animal health products to 30% within 3 years, and to achieve a 1:1 ratio between animal health product revenue and raw material product revenue within 5 years.

To expand its CDMO business, DaBomb has invested in setting up a 20KL fermentation production line in recent years. The first phase of expansion will be completed by the middle of next year, increasing capacity by dozens of times. Another 20KL fermentation tank will be added in the second half of next year, which will further increase capacity.

DaBomb , whose product portfolio optimization strategy is gradually showing results, reported revenue of NT$197 million in the first half of the year, a year-on-year decrease of 15.01%. However, the increased proportion of shipments of high-margin enzyme products boosted the gross profit margin by 5.94 percentage points to 7.95%, and operating losses were significantly reduced by 43.26%. Compared to the same period last year, which saw a net loss of NT$24.12 million after tax, the company still experienced a smaller loss than the same period last year, with a net loss per share of NT$0.51. In particular, the gross profit margin in the second quarter was 11.54%, which not only increased by 7.11 percentage points from the first quarter but also reached a new high in nearly ten quarters. The operating loss also shrank to NT$8.43 million, demonstrating a significant improvement in the company's core business performance.

Liu Yufen stated that, in line with the global trend of banning antibiotics in the animal health market, the proportion of high-value-added animal health products will increase in the future, and the gross profit margin will improve significantly. In 2024, the CDMO business will be fully launched, the scale of operations will be further expanded, and revenue and profit growth are expected to occur simultaneously.

With its core technology of integrated microbial fermentation, DaBomb focuses on the development of high-efficiency animal protein raw materials and functional additives. Its product line originally only included functional raw materials such as soybean hydrolysate (Yuetai) and fermented soybean powder produced by solid fermentation technology. In recent years, it has continued to invest in mass production fermentation production line equipment to add liquid fermentation technology to produce functional animal health products such as probiotics and enzymes.

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

Liu Yu-fen said that the renamed DaBomb has set a goal to increase the proportion of animal health product revenue to 30% within 3 years and to achieve a 1:1 ratio between animal health product revenue and raw material product revenue within 5 years. In the future, the profit growth momentum will be better than the revenue.

Original source:https://ctee.com.tw/livenews/aj/ctee/A88131002023080315465474