Traders News Source Senior Editor, Mark Roberts Interviews Richard Hu, CEO Bon Natural Life Limited (NASDAQ: BON)
Richard Hu, CEO Bon Natural Life Limited (NASDAQ: BON)
Mr. Hu has served as the Chairman of the Board and President of Xi’an App-chem Bio (Tech) Co., Ltd. since April of 2006. He is the legal representative and the ultimate owner of Xi’an App-Chem. From June 2000 to March 2006, Mr. Hu served as the department manager and Deputy Executive President of Shaanxi Iko Ostriches Co., Ltd. and Xi’an England Bioscience Co., Ltd. From January 1999 to May 2000, Mr. Hu served as the trainer-in-charge of Xi’an Synchrobit Co., Ltd. From July 1997 to December 1998, Mr. Hu served as trainer-in-charge of Ping An Insurance Group Xi’an Branch Office. From July 1993 to June1997, Mr. Hu served as staff and department manager of Shaanxi Agriculture, Industry and Trade Co., Ltd. Mr. Hu obtained a bachelor’s degree in Biology upon his graduation from Northwest University in 1993.
Mr. Hu has over twenty years of experience in natural products industry, an abundant industry network, and deep familiarity with the global natural health market, with extensive experience in the Big Health markets in Europe and the United States. In addition, he maintains sound business relations with well-known large enterprises in the health and pharmaceutical industry. We believe Mr. Hu’s depth of experience and extensive industry knowledge make him well-positioned to continue leading the company forward.
About Bon Natural Life Limited
The Company focuses on the manufacturing of personal care ingredients, such as plant extracted fragrance compounds for perfume and fragrance manufacturers, natural health supplements such as powder drinks and bioactive food ingredient products mostly used as food additives and nutritional supplements by their customers. For additional information, please visit the Company’s website at www.bnlus.com.
Thank you for giving us your time to answer our questions.
- Q: Could you give us a brief overview of BON operations and revenue streams, including any subsidiaries?
A: BON is a bio-ingredient solution provider in the natural, health and personal care industry. Our products are segmented into the following three categories: fragrance compounds, health supplements (powder drinks) and bioactive food ingredient. Fragrance compounds are all-natural plant-based ingredient that go into consumer fragrances, perfume and detergents. Health supplement are powder drinks that aimed to regulate one’s biome health and boost immunity. Bioactive food ingredients are also all-natural plant-based compounds that used in drinks, food and cosmetics.
- Q: Would you describe how any pandemic restrictions impacted the company in H1 2022?
A: In the first half of FY2022, COVID-19 had some but non-significant impacts on our procurement and sales logistics. Meanwhile, COVID-19 also stimulated strong demand for our products and drove our sales growth. Overall, from our financial performance, our revenue increased by 17% compared to the same period last year.
- Q: Is R&D for BON products conducted by the company or by outside entities?
A: The Company conducted its own R&D.
- Q: The new Yumen production facility is reported to commence operations in September. Will it be open on schedule, can you describe it, and how will the new facility impact BON operations?
A: Yes, the company expects Yumen Plant commissioning is on schedule and forecasted to commence in September 2022 to deliver near term production of fragrance compounds and bioactive food ingredients. We expect that the new production facility will increase the production capacity of fragrance compounds and bioactive food ingredients by 200%, representing an 150% annualized growth potential in total revenue. We believe that the commencement of this new plant will mark another significant growth step forward for the company and lay a solid foundation for our global business expansion plan.
- Q: Can you describe the new cruciferous vegetable-based probiotic powder drink product to inhibit H. pylori, and FeatherPure. When will these products be available to consumers?
A: FeatherPure is an all-natural women’s personal care gel that provides female reproductive system care. It helps to adjust PH value of female reproductive system to a healthy level and has anti-bacterial and anti-inflammatory function. FeatherPure has launched in the Chinese market in December 2021. We expect that FeatherPure will bring approximately US$3 million in revenue in the next 2 years.
Our new cruciferous vegetable based probiotic powder drink is the first proprietary product of our new broccoli-based health supplement series. It aims to inhibit the proliferation of H.pylori, a digestive system disease, and help restore and regulate the biome health of one’s digestive system. We believe that
Both products are now available for sale to consumers in mainland China.
- Q: Is suppling product to third party customers a significant part of your business and do you expect that segment of your business to grow in the near term?
Our legacy business is the R&D, manufacturing and sales of bio-ingredient products, and selling consumer products accounts for a small portion of our business. However, with the rapid development of the health and personal care industry in China, on the premise of sustaining and growing our legacy business segments, we will devote more R&D and sales efforts in our new consumer-oriented products. We believe that the rollout of the consumer products will provide an additional growth driver for BON and capitalize the increasing awareness and consumption of health supplements both during and post COVID-19 pandemic in the next 5 to 10 years.
- Q: BON is a growing company with profitable operations, yet the company shares sell below book value and most standard valuation metrics indicate that BON shares are oversold. Why do you believe that is the case?
The company shares the view that our stock is currently oversold. However, first of all, we do believe that we are a leading supplier in the natural and health ingredients and solutions in China. We have over 16 years of experience, leading R&D technologies and profound market recognition in the industry. Secondly, health and personal care industry is experiencing exponential growth both in China and all over the globe, which brings us a huge growth potential in the market. Again, our business growth is thriving. Our legacy bio-ingredient business maintains steady growth each year and the sales of personal care consumer products also shows a strong growth momentum. As the Yumen Plant will commence in September 2022, we could increase our production capacity to fulfill the customer demand that we previously cannot meet due to limitation in production capacity. Overall, we are optimistic and believe that BON’s values will be well recognized by our shareholders and investors and reflected in our stock price in the future.
- Q: Can you describe your future vision for your company?
Our short-term growth strategies for the next 1 to 2 years are as follows:
First, we will continue to look for opportunities to expand our business operations and raw materials sourcing on a global level, especially in the U.S., Japan and Europe.
Second, we expect to put more effort in product line expansion as well. In the following year, we will introduce 2 to 3 new raw material categories in order to expand our sales in the health market and get more competitive.
Last but not least, we will continue to focus on our R&D in developing new consumer products that target to help with one’s digestive health, cardiovascular health and immunity. Right now, we have products that are in testing stage and will be ready to launch into the market in the near future. In addition, we expect we are going to acquire one or two companies in the following year to improve our technology and sales network expansion.
Our long-term vision is to become an innovative and global leader in the health and personal care industry. We believe that by combining micro-biome health technology and leading-edge insight, we will be able to develop different compounds and products for customers with different needs and create more compelling long-term values for our shareholders.
The Traders News Team
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