A New Additional Into My Portfolio - Sunzen Biotech's Transformation and Growth

Sunzen Biotech Berhad has undergone significant business transformation and growth in recent years. Here are some key investment highlights to help you better understand the future prospects of this company.

Exiting from Animal Health Business. As of the latest record (FY2022), the animal health business accounted for 6.01% of the annual revenue but incurred a pre-tax loss of RM4.67 million. On 8 April 2024, Sunzen announced the termination of this business, which is expected to significantly improve the company's profitability. Following the complete divestment, the company's net profit margin is expected to see substantial improvement.

Turnaround Under New Management. Since the new management cum major shareholders took over, Sunzen has successfully turned from losses to profits and has maintained a net profit for the past three years, with several quarters showing year-over-year (YoY) growth consecutively. This demonstrates the effective leadership of the management and the robustness of the company's business.

Revenue and Profit Growth. Excluding fiscal adjustments, Sunzen's revenue for FY2023 was RM98.1 million, with a net profit of RM6.6 million, representing an 88% YoY growth. This data reflects the strong performance of the company's core business and increased market demand.

Strategic Acquisitions and Ecosystem Building. Through the acquisition of YANMING, FINSOURCE, a leading and licensed financial services provider, and ECOLITE, a cash cow machine in the bird nest business, Sunzen's business contributions have become increasingly stable. The company is committed to building an ecosystem that integrates human healthcare and financial services. Sunzen is currently in discussions with several companies for potential acquisitions or equity partnerships to expand its business scope.

At the end of 2022, Sunzen acquired a stake in Xmegami, providing OEM services for the latter's products (aesthetic products) and thus entering the B2C ecosystem. On 6 May 2024, Sunzen proposed to acquire a 70% stake in Eye Nation Medical Sdn. Bhd. (ENM) for RM6.37 million, entering the healthcare sector and further improving the ecosystem. The acquisition is expected to be completed in Q3 2024, with related contributions reflected in Q4 2024 results.

In conclusion, Sunzen Biotech Berhad is achieving steady growth through strategic transformation and expansion. With the continuous addition of new businesses and the completion of its ecosystem, Sunzen's profitability and market competitiveness will be further enhanced. These positive changes bring great confidence and expectations to investors.