DaBomb (6578) is further expanding its capital expenditure to develop its CDMO business, and a return to profitability in the fourth quarter is expected (share price on September 27: NT$17.15).

DaBomb Protein Biotech Corp. (6578), a probiotic biointegration engineering company, held its second extraordinary general meeting of shareholders in 2023 today. The company passed amendments to certain articles of its articles of association, changing its Chinese name to " DaBomb Protein Biotech Corp.股份有限公司" and its English name to "DABOMB PROTEIN BIOTECH CORPORATION" to meet future operational and development needs. Chairman Liu Yu-fen stated that DaBomb Protein Biotech Corp. with its core concept of antibiotic alternatives, utilizes postbiotic immune enhancement technology to provide precise solutions for animal health. In the future, the company will continue to launch high-value-added products, expand capital expenditure at its Taiwan plant, and develop CDMO business, aiming for long-term stable profit growth based in Taiwan and with a global perspective.

DaBomb Protein Biotech Corp. primarily targets export markets, with Southeast Asia accounting for over 60% of its revenue. Facing market price competition, DaBomb Protein Biotech Corp. has launched high-value-added products.The proportion of high-margin animal health products is gradually increasing, and the effects of the proactive transformation are beginning to be reflected in this year's operating performance. Although revenue in the first half of the year was lower than the same period last year, gross profit of NT$15.64 million represented a significant increase of 2.4 times. The gross profit margin for the single quarter also rose rapidly from 4.43% in the first quarter to 11.54% in the second quarter. With continued optimization of the product mix in the second half of the year, the gross profit margin is expected to improve further.With shipments of animal health products climbing again in the fourth quarter, a return to profitability for the quarter is expected..

DaBomb Protein Biotech Corp. has launched two new animal health products, DBT-100 HT and DBT-100 LS, targeting the aquaculture and livestock industries respectively. These two new products are developed based on the functions of probiotics and postbiotics compiled by the International Society for the Study of Probiotics and Prebiotics (ISAPP) and tailored to customer needs. They can replace antibiotics, promote growth, improve feed efficiency, and reduce production costs, addressing a pressing market demand. Shipments of these products have already begun to a major US-based global marketing company specializing in animal health and nutrition. 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.

Animal health products have received positive feedback from customers, and the high added value of these products is unaffected by fluctuations in raw material prices, which is beneficial for DaBomb Protein Biotech Corp. to promote its products to Europe and the United States beyond Southeast Asia. In response to the expansion of overseas markets and the needs of CDMO customers, DaBomb Protein Biotech Corp. is increasing capital expenditure at its Taiwan plant. The first phase of the expansion project, which involves setting up a 20KL fermentation production line, has been contracted out and is expected to be completed in Q2 of next year, increasing capacity by several dozen times. Another 20KL fermentation tank will be added in the second half of next year, further increasing capacity.

Liu Yufen stated that product development is geared towards strategic alliances and functional customization needs. CDMO has received orders from a large US global marketing international animal health and nutrition strategy company, a US-based feed additive developer focused on R&D, and a domestic enzyme R&D and design company. It will also collaborate with a Singapore-based startup that possesses novel antibacterial 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. plans to 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, the company 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 Genet's Viewpoint, the leading platform for biotech investment, published on September 27, 2023, by Chen Manlin.
http://www.genetinfo.com/investment/featured/item/74015.html