Bioalpha confident of delivering ‘robust’ earnings for FY19

This article first appeared in The Edge Financial Daily, on June 12, 2019.
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KUALA LUMPUR: Bioalpha Holdings Bhd, a health supplement and beauty products manufacturer, is confident about delivering “robust” earnings for its financial year ending Dec 31, 2019 (FY19), as it focuses on strengthening its export markets in China and Indonesia, and ventures into Thailand.

In China, the group is broadening its distribution network by entering the business-to-consumer or B2C market and has appointed a local partner to promote and distribute its house brand products there, including listing them on e-commerce platforms such as JD.com and Taobao.com, according to managing director William Hon.

In Indonesia, Bioalpha has started to make products in the health supplement category, after getting the necessary regulatory approvals. “This is in addition to the functional food products which we are already producing and distributing in Indonesia. With this development, we expect our Indonesian sales to gradually improve as we launch more health supplement products going forward,” Hon said in a statement issued after the group’s annual general meeting yesterday.

As for its expansion to Thailand, the group has appointed an exclusive distributor to market its house brand products, Hon said.

Back home in Malaysia, the group is collaborating with a local company in the hospitality sector to venture into the personal care line.

“We are working towards launching an exclusive line of personal care products which will be marketed under our house brand label. At the same time, we also offer our ODM (original design manufacturing) clients the opportunity to introduce new product category to their customers. This personal care line shall form a new revenue stream for us going forward,” Hon said.

The group has also started the construction of a new collection, processing and packaging centre at Pasir Raja Herbal Park in the last quarter of 2018 (4Q18). “This plant will be used to process herbs which are harvested on-site at the herbal park. We target to complete the construction by 3Q19,” Hon said.

In addition, Hon said herbal farming at the group’s Desaru and Pasir Raja Herbal Parks is progressing well, and that the group has started harvesting medicinal-value plants like soursop and papaya leaves. “We expect our agriculture business to start contributing to the bottom line in FY19.”

Meanwhile, in anticipation of a larger harvest tonnage and more orders, the group is expanding production capacity at its existing plant in Bangi, expected to be completed by the end of the first half of FY19.

Under its pharmacy business, the group is looking at setting up more Constant pharmacy outlets through franchising. It is also exploring possible collaborations with high-end grocery chains. The group now has over 20 Constant pharmacies nationwide.

In FY18, the group’s net profit jumped 52.6% to RM12 million from RM7.87 million, as revenue climbed 24.3% to its “best-ever” of RM69.50 million from RM55.92 million previously.

Bioalpha shares rose half a sen or 2.44% to close at 21 sen yesterday, with a market capitalisation of RM180.64 million.