DaBomb operating margin turned positive last quarter, and the proportion of functional additives has increased this year.

With the Zhangzhou plant halting its losses, analysts expect DaBomb (6578) to achieve a turnaround in operating profit in the fourth quarter of last year, although there may still be exchange rate losses outside the business. Looking ahead to this year, with the existing burdens gone and the new functional additive plant commencing production in the middle of the year, the company's order intake for niche products will be boosted, accelerating its transformation.

DaBomb pointed out that if we look at the Taiwan plant alone, the operating profit had already turned positive in May last year. After the Zhangzhou plant stopped bleeding, it also recorded a one-off asset impairment of more than NT$20 million in the third quarter. The fourth quarter was free of the burden of the Zhangzhou plant, which is the key to the group's operating profit turning positive.

Last August, the company also invested in a new wave of capital expenditures, investing in a new factory for functional additives such as probiotics and enzymes. Mass production is expected to begin in the middle of this year, increasing depreciation and amortization by about 500,000 yuan per month. However, this will significantly expand the momentum for increasing orders for niche products. This year, the team aims to increase the revenue share of functional additives to 20%.

The above content is excerpted from MoneyDJ News, January 18, 2024, at 10:33:35, reported by reporter Xiao Yanxiang.
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