Focus Stock: Zhonghua Sheng Achieves Profit Turnaround in First Half with Two Core Businesses, Stock Hits Upper Limit

Zhonghua Sheng (1762-TW) announced that after completing the inventory processing of its fish oil project and focusing on its two core businesses—Specialty API (high-tech barrier raw materials) and CDMO—the company achieved a net profit of NT$132 million in the first half of the year, turning from a loss to a profit compared to the same period last year. This led to its stock price hitting the upper limit of NT$35.75 on July 7, surpassing the monthly moving average.

In the first half of the year, Zhonghua Sheng's revenue reached NT$666 million, up 93.6% year-on-year. Its gross margin was 39.94%, an increase of 31.51 percentage points from the previous year. Operating margin was 17.27%, turning positive compared to the same period last year. Net profit was NT$132 million, turning from a loss to a profit, with earnings per share at NT$2.39.

Zhonghua Sheng attributed the improvement in its first-half performance to the stable growth of its core businesses, product mix optimization, and operational efficiency improvements. Additionally, the company launched digital transformation projects such as XAP ERP (Enterprise Resource Planning), LIMS (Laboratory Information Management System), and QMS (Quality Management System) to enhance digital quality in operations and quality management.

In the CDMO business, Zhonghua Sheng has established a joint venture platform with BioDuro, an international new drug CRDMO company, integrating both parties' capabilities in drug development, process development, and commercial production. Leveraging BioDuro's global customer network and commercial development resources, the joint venture platform has demonstrated commercial synergies, strengthening Zhonghua Sheng's one-stop service capabilities from process development to commercial production.