KUALA LUMPUR - BioNexus Gene Lab Corp (NASDAQ:BGLC), a biotechnology and chemicals company, announced that its subsidiary, Chemrex Corporation Sdn. Bhd., is investing approximately USD $450,000 to initiate the production of color paste for the composite industry. The new facility is expected to start operations by the end of September 2024, aiming to meet the increasing demand for high-quality composite materials in various sectors.
The investment in the production of non-drying color paste is projected to yield increased profit margins for Chemrex by bringing production in-house. This strategic move is anticipated to lead to stronger financial performance due to higher efficiency and control over production costs. Additionally, the company expects to enhance quality control, ensuring that its products meet stringent standards and reinforcing its reputation for reliability.
The ability to produce color paste internally is also set to improve the timeliness of product delivery, which is crucial in the fast-paced industrial environment. Chemrex believes this will bolster customer satisfaction and solidify long-term partnerships. With competitive pricing, the company plans to expand its market reach across Southeast Asia, the Middle East, Australia, and New Zealand.
Looking ahead, Chemrex has outlined plans to establish additional production facilities in the Middle East and Vietnam. This expansion strategy is designed to position the company closer to key markets, enabling more efficient and cost-effective responses to regional demand. The company also intends to leverage bulk purchasing of raw materials to benefit from economies of scale, which could lead to reduced production costs and the development of new revenue streams.
Sam Tan, CEO of BioNexus Gene Lab Corp, stated that the new business development is a testament to Chemrex's dedication to quality, innovation, and market leadership. The company's global expansion and investment in color paste production are expected to capitalize on emerging market opportunities and provide enhanced value to customers and shareholders.
This news is based on a press release statement from BioNexus Gene Lab Corp.
In other recent news, BioNexus Gene Lab Corp has made noteworthy changes and strategic investments. The company has revised its corporate bylaws, specifically the quorum requirement for stockholder meetings. The new rule, which is now in effect, requires one-third of the outstanding shares entitled to vote to constitute a quorum, a decrease from the previous majority requirement.
Simultaneously, BioNexus has joined forces with Malaysia's Co-Investment Fund (MyCIF) to invest in Ascension Innovation Sdn Bhd (AISB), a healthcare technology firm. With an investment of approximately USD 390,000, the partnership aims to support Malaysia's National Electronic Medical Records (EMR) Plan and expedite the deployment of AISB's AI-driven healthcare platform, aiCMS.
BioNexus CEO, Sam Tan, emphasized the strategic nature of this investment, highlighting AISB's potential. The investment is part of the Environmental & Social Impact (ESI) Scheme and marks AISB as the first recipient of the ESI scheme investment under the MyCIF initiative. The company's recent developments reflect its strategic investment choices and its focus on streamlining governance processes.
InvestingPro Insights
BioNexus Gene Lab Corp (NASDAQ:BGLC) has been navigating a challenging financial landscape, as reflected in recent InvestingPro data. With a market capitalization of just 6.29 million USD, the company is considered a micro-cap stock, which can often be subject to higher volatility and market risks. This is underscored by the company's price performance, which has seen significant declines: a 19.02% drop over the past week and an even steeper 64.25% fall over the past year. The current price is hovering at only 11.06% of its 52-week high, indicating a considerable retreat from its peak valuation.
Despite these setbacks, Chemrex Corporation's initiative to start producing color paste could potentially lead to improved margins and profitability. This aligns with one of the InvestingPro Tips that highlights BGLC's trading at a low revenue valuation multiple, suggesting that the stock could be undervalued relative to its revenue. However, investors should note that BGLC has been quickly burning through cash, which is a critical consideration given the company's investment plans.
For those interested in a deeper analysis, InvestingPro offers additional insights on BioNexus Gene Lab Corp, including 15 more InvestingPro Tips, which provide a comprehensive overview of the company's financial health and stock performance. These tips can be a valuable resource for investors looking to make informed decisions about their investment in BGLC.
Investors can access these tips and more detailed metrics by visiting the dedicated InvestingPro page for BioNexus Gene Lab Corp at: https://www.investing.com/pro/BGLC.
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