PETALING JAYA: Yenher Holdings Bhd
’s joint venture (JV) with Bioloop Sdn Bhd to establish a black soldier fly (BSF) production facility is expected to generate an annual revenue of RM5mil to RM6mil, with an estimated net profit of between RM1.2mil and RM1.3mil in its first phase at full capacity, according to Hong Leong Investment Bank Research (HLIB Research).
This contribution represents around 4% to 4.4% of the research house’s projected financial year 2025 (FY25) net profit forecast.
The JV – Yenbio – involves an initial start-up capital of RM3mil, with Yenher holding a 60% stake amounting to RM1.8mil.
The funds will be used for factory setup, machinery acquisition and initial working capital to commence production.
HLIB Research said Yenbio plans to lease a factory by March or April 2025 and repurpose it for BSF farming with the expertise of Bioloop, which has over four years of technical know-how in the field.
It said commercial production is targeted to begin by the third quarter of 2025, pending the installation of specialised machinery and equipment.
HLIB Research said BSF is a unique insect species capable of converting up to 80% of organic waste into valuable by-products such as fat, oil and protein meal.
The research house said currently, Yenher has already incorporated BSF-derived ingredients sourced from Bioloop in its animal feed formulations.
Beyond internal use, HLIB Research said BSF fertiliser, known for its sustainability and eco-friendliness, has strong demand in the agriculture sector as a cost-effective alternative to traditional fertilisers.
“BSF fertiliser is highly sought after in the agriculture sector as a sustainable, cost-effective, and environmentally friendly alternative to traditional fertilisers, aligning well with the growing market focus on green practices,” it added.
HLIB Research has maintained a “buy” recommendation on Yenher with an unchanged target price of RM1.45, pegged to a pierce to earnings multiple ratio of 16 times FY26 earnings.
While forecasts remain unchanged, HLIB Research said the JV is seen as a positive step toward capacity expansion.
“Yenher’s outlook remains promising, driven by robust sales growth, strengthened ringgit, and its upcoming capacity expansion.
“With the new facilities set to significantly enhance production capabilities, the group is poised to enter an exciting multi-year growth trajectory,” it noted.
