Health supplements group Bioalpha Holdings Bhd expects revenue to grow more than 30% a year on a constant basis starting this year, fuelled by outlet openings and the implementation of a royalty and e-commerce programme by the fourth quarter of 2015.
Managing director William Hon said its recent collaboration with MyAngkasa Holdings Sdn Bhd, which enables Bioalpha to tap into the cooperative’s eight million member base, will also contribute to the group's revenue.
Hon also expects its halal product exports to the United Arab Emirates (UAE) to start contributing to the group from 2Q or 3QFY16.
On Oct 28 last year, Bioalpha signed a memorandum of understanding with Abu Dhabi-based Fathima Group of Companies LLC which would see its products sold in the latter’s 25 outlets in the Middle East, including the UAE.
“We expect [revenue] to grow 20% to 30% organically every year, [but] this is without taking into account additional revenue [from new outlets, the UAE export venture and the e-commerce/royalty programme]," he told reporters after the company’s annual general meeting yesterday. “We expect revenue to be higher with the new ventures.”
Bioalpha recently opened its LifeSpring health supplements outlet in Mont’Kiara, and is keen to open another five stores by end-2015.
Through this venture, he said, Biolpha is expected to expand its market share to more than 4% by year end from 3.8% now.
Hon said the group is also looking at increasing its retail house brand products, which provide better profit margins.
“The original design manufacturer (ODM) customer segment will remain our core because we also learn from product enhancement [through manufacturing]. However, our house brands provide better margins.
“So, we hope to balance out the production of our house brands and ODM business which is about 60:40 now,” he said.
On April 27, Bioalpha, which has finance ministry-owned Perbadanan Nasional Bhd (23% stake) and Malaysian Technology Development Corp (17.6% stake) as its substantial shareholders, was listed on the ACE Market of Bursa Malaysia.
In 1QFY15, Bioalpha returned to the black with a small net profit of RM14,000 after posting a net loss of RM18,400 a year ago.
Revenue rose 25.7% to RM3.2 million in 1QFY15 from RM2.6 million in 1QFY14, said Hon, adding that widespread exhibitions in Indonesia helped to secure more sales orders which translated into higher revenue.
“We also forecast more than 50% sales contribution from Hong Kong, China and Indonesia in 2QFY15 compared with a year-ago period,” he said.
For 1QFY15, sales in Malaysia contributed 47.4%, followed by Indonesia at 40.6%, Australia (11.19%) and others (0.77%).
This article first appeared in The Edge Financial Daily, on June 24, 2015.