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STAR COMBO PHARMA LIMITED Investor Presentation 2021
65746_rns_2021-11-03_dc990640-f67c-44bc-8a50-e9afbd98b8fa.pdf
Investor Presentation
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CEO Su Zhang November 2021
STAR COMBO PHARMA LIMITED
Investor presentation
Corporate snapshot
| Shareholders | |
|---|---|
| GoldenstarPharmaceutical Investments Limited | 36.35% |
| Jinxing (Star) Zhang | 28.31% |
| Miss Su Zhang | 8.49% |
| LepuMedical | 8.16% |
| Issued capital | Capital Structure | |||
|---|---|---|---|---|
| Ordinary Shares | 96,526,959 | ASX Ticker | S66 | |
| Escrowed Shares | 38,265,510 | Market Capitalisation | $36.37M | |
| Total Voting Shares | 134,792,469 | Share price (3 October 21) | $0.27 | |
| Share Options | 2,110,000 | Cash at Bank | $17.3M |
| Sh | |
|---|---|
| Go | |
| Jin | |
| Mi | |
| Capital Structure | |
|---|---|
| ASX Ticker | S66 |
| Market Capitalisation | $36.37M |
| Share price (3 October 21) | $0.27 |
| Cash at Bank | $17.3M |
Star Combo Pharma Limited (ASX:S66) is a leading manufacturer and distributor of premium health and natural beauty products, with its development and manufacturing facilities located in Smithfield, New South Wales.
Star Combo's core strategy is to become Australia's leading manufacturer of nutraceuticals.
Founded and directed by pharmacists and experts in health and supplement manufacturing, Star Combo's products are made from natural ingredients backed with scientific Research and Development and adheres to the highest manufacturing practices governed by the Therapeutic Goods Administration.
Some of Australia's leading supplement brands contract manufacturing to Star Combo while their own brand and product development team continues to produce products demanded by a growing market.
Key Themes FY21
Negative COVID impact on earnings with $6.3M non-cash asset writedown
Construction and upgrade of multimillion dollar manufacturing facilities to
- Positive operating cash flow of $332K
- of Austoyou and Koala Mall
- increase capacity
- Strong cash position of $17.3M
- health and wellness products
Benefiting from macro trends with strong demand for Australian Made
Resilience in contract manufacturing division despite COVID headwinds
Organic growth through growing contract manufacturing division
Offers shorter lead time in a growing market
Our Strategy…
…To become Australia's leading nutraceutical manufacturer 4
Capital investment in facilities upgrade to meet domestic and overseas demand
Upgrade underway to double production capacity with R&D and Test Lab to produce innovative products
Maximising opportunity from macro trends
Preventative health paramount during pandemic with growing demand for Australian Made health and beauty products
Australian manufacturers are global leaders in best practice
Expanding in new markets
With presence in New Zealand, Russia and Vietnam and expected to grow
Manufacturing a broad range of products with strong order book in place
– Complementary medicines, nutraceuticals, vitamins/supplements, soft gel capsules, hard gel capsules, tablets, powders, liquid, sachet
Strong foot hold in domestic market with export market showing signs of growth
- Vertically integrated business model with control over supply chain
- First OEM contract with New Zealand in FY21 and second order received
Strengthening relationships with existing OEM customers
- Order volume over $6M already received for FY22
- Developing innovative "new" products
- Using patent and clinically trialed formulation to produce a two-piece different colored capsule
- New R&D and Test Laboratory centre under construction to extend services and offering, growing the innovation aspect of the business
Organic growth drivers
6 * Non-operating impairment loss of $6.3M as carrying value of Retail division impaired fully due to COVID impact on business
FY21 Results summary
| A$M | FY21 | FY20 |
|---|---|---|
| Operating revenue | 26.72 | 38.84 |
| Operating profit (loss) attributable to owners* | (7.88) | (0.35) |
| Operating profit (loss) attributable to shareholders of s66* | (7.89) | (0.35) |
| Operating cash flow | 0.33 | (1.02) |
| Net tangible asset backing per ordinary share ($) | 0.22 | 0.22 |
| Basic earnings/(loss) per share (cents) | (0.058) | (0.004) |
| Diluted earnings/(loss) per share (cents) | (0.058) | (0.004) |
- Manufacturing division continues to perform strongly
- A good start in Q1 FY22, production volume increased by 24% when compared with Q1 FY21
Increase in production volume
- Australia's complimentary medicine sector valued at $5.6BN*
- Australia's export of complementary medicine estimated to be $1.1BN*
- 7 out of 10 people have used at least one form of complimentary medicine in the last year
- The complimentary medicine industry continues to outpace growth of the broader economy
The Australian vitamin and dietary supplement category has doubled in size over 10 years
Forecast to grow 22% CAGR over next 10 yrs
Market dynamics
Our people
People Safety COVID
Our team have demonstrated agility and tenacity in guiding the business through the uncertain COVID environment and have continued to execute on our strategy of becoming Australia's leading nutraceutical manufacturer.
As a manufacturing business, we are dedicated to ensuring we have a safe workplace.
The company has in place a comprehensive occupational health and safety program which all staff are required to follow.
No safety incident has been reported at Star Combo YTD 2021.
| A comprehensive COVIDsafety plan has beenimplemented at Star Combo. |
|---|
| Significant precautions andadditional protocols are inplace to safeguard the healthand wellbeing of our |
| employees. |
171 Woodpark Road
TGA – licensed nutraceutical manufacturing site Re-commenced expansion after works put on hold in July due to COVID restrictions
Expansion involves
- Upgrading existing facility
- Installation of 13 new production lines
- $7.2M invested to date, on track to be completed in 2022
Rationale
- Double production capacity
- Cost effectively address, growing demand in both local and overseas markets and become Australia's leading nutraceutical manufacturer
Stage 1 - Manufacturing facilities upgrade
165 Woodpark Road
Development Application approval received in August from Cumberland City Council to begin works and build R&D and Test Laboratory Centre
Expansion involves
• Building of new facility (see diagram)
Rationale
- Develop new and innovative products
- Meet growing demand for vitamin and dietary supplements
- Cost saving with added synergy to existing business unit
- Shortened turn around time from new product development to market entry
Stage 2 - Manufacturing facilities upgrade
FY21 Achievements
Continued growth in contract manufacturing division
Operating cash flow positive with $17.3M in cash in bank
Construction of multimillion-dollar, manufacturing facilities to increase capacity
Contract manufacturing business remains resilient in face of COVID pandemic
FY22 Outlook
Contract manufacturing sector remains main area of strategic focus – expect immediate and significant growth in 2022
Contract manufacturing outlook remains resilient benefiting from strong macro trends
New market development opportunities providing potential for growth
Manufacturing upgrade expected to be finalised in 2022
Achievements & Outlook
Investor relations investor[email protected]
THANK YOU
The information in this presentation is not a prospectus or other form of disclosure document prepared in accordance with the requirements of the Corporations Act 2001 (Cth) (Corporations Act) and will not be lodged with the Australian Securities and Investments Commission (ASIC). This presentation provides information in summary form and general information regarding Star Combo Pharma Ltd ACN 615 728 375 (Star Combo or the Company) and the proposed placement to sophisticated and professional investors.
This presentation contains information, ideas and analysis which are proprietary to Star Combo. By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you agree not to reproduce in any manner any part of the information contained herein without our prior written consent. This presentation is not complete, is intended only as an outline and has been prepared by and issued by Star Combo to assist in informing interested parties about the Company and should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation.
This presentation is current as at the date on the cover page. The information in this presentation, therefore, remains subject to change. The Company is under no obligation to update the presentation and the information in this presentation remains subject to change by the Company in its absolute discretion and without notice.
This presentation may contain forward looking statements. Whilst the Company has no reason to believe that any such statements are either false, misleading or incorrect, it cannot and does not warrant or guarantee that through either the passage of time or actions beyond the control of the company they will not become so. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. Nothing contained in this presentation constitutes investment, legal, tax or other advice. This overview of investment does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company's prospects.
The Company's statutory results are prepared in accordance with International Financial Reporting Standards ("IFRS"). This presentation also includes certain non-IFRS measures in presenting the Company's results. Any additional financial information in this presentation which is not included in the Company's 30 June 2018 Financial Statements was not subject to independent audit or review. Investors should be aware that certain financial data included in this presentation is "non-IFRS financial information" under ASIC Regulatory Guide 230: "Disclosing non-IFRS financial information" published by ASIC and may also be "non-GAAP financial information" within the meaning given under Regulation G of the U.S. Securities Exchange Act of 1934, as amended.
Non-IFRS financial information does not have a standardised meaning prescribed by Australian Accounting Standards ("AAS"). Accordingly, the non-IFRS financial information in this presentation: (i) may not be comparable to similarly titled measures presented by other entities; (ii) should not be construed as an alternative to other financial measures determined in accordance with AAS; and (iii) is not a measure of performance, liquidity or value under the IFRS. Investors are cautioned, therefore, not to place undue reliance on any non-IFRS financial information included in this presentation.
To the maximum extent permitted by law, the Company and its advisers make no representation and give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility and assume no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omissions, from any information, statement or opinion contained in this presentation. All values are expressed in Australian currency unless otherwise stated.
This presentation is not for release to US wire services or distribution in the United States or any country where it may be unlawful. See "International Offer Restrictions".
