China yeast specialist aims for IPO off aquafeed demand
China’s aquaculture sector is being eyed as a key driver for growth by a local yeast-focused feed ingredients firm which has doubled revenues over the last three years.
Zhejiang Dong Cheng Biotech Co Ltd (it also uses the brand name ‘Dochoo’) saw revenues total CNY 140 million (USD 19.7 million EUR 17.8 million) in 2018 and the firm aims to increase that figure to CNY 400 million (USD 56.2 million, EUR 50.9 million) in 2021, according to a presentation to investors by company management.
Established originally in 1996, the firm has developed yeast-based additives for feed companies in both the poultry and pork sector, but sees aquaculture as the strongest driver of future growth given an increased emphasis on feed efficiency.
Dong Cheng saw revenues rise 43 percent to CNY 93.4 million (USD 13.4 million, EUR 11.9 million) in the first six months of 2019 with net profit up 104 percent to CNY 7.9 million (USD 1.1 million, EUR 1.0 million).
The firm, which is listed on China’s board for small and medium sized firms, is also aiming for an IPO on one of the country’s two main exchanges.
Additives like yeast has come increasingly into focus as Chinese seafood firms and government seeks more efficient ways to feed the country’s aquaculture stocks – particularly as the industry moves to higher value species like grouper, which are far more feed intensive than the herbivorous species like carp and tilapia that hitherto dominated the sector.