KUALA LUMPUR: Sunzen Biotech Bhd expects to post a profit in the fiscal year 2022 (FY2022) on the strength of improved earnings from its loan financing and traditional Chinese medicine (TCM) sectors.

Teo Yek Ming, group managing director and chief executive officer, said Sunzen was also progressing in reducing its operating costs and raising the effectiveness of the entire group.

He told the New Straits Times that its asset rationalisation effort would remain its main priority.

Sunzen sold its factory in Kota Kemuning, Shah Alam last year, saving RM 600,000 in interest on term loans and operational expenses every year. Additionally, it shut down eight TCM shops.

"We will continue to identify non-core assets within the group and dispose of them at the right price to improve our net profit," Teo said.

Sunzen made a profit in the first half of its current financial year ending December 31 2022.

Teo said the group would focus on building its health and wellness subsidiary Ecolite and financing arm Finsource Credit, as well as its animal health segment.

"Ecolite and Finsource Credit are doing really well. These two subsidiaries performed very well during the pandemic stage," he said after its AGM and EGM yesterday.

The TCM segment registered a profit of RM4.15 million in FY 2021 compared with a profit of RM380,000 in the previous corresponding year mainly attributed to higher product margin and operational efficiency in tandem with higher sales orders received.

Its loan financing segment posted RM1.09 million in profit for the seven months up to December 31, 2021, on the back of RM1.75 million in revenue.

For its TCM segment, Teo expects the export volume of bird's nest to China to recover to the pre-pandemic level this year.

The loan financing business is expected to generate more revenue moving forward, as applications for business loans from small and medium enterprises have been increasing.

Meanwhile, Teo expects the group's animal health segment to better this year, given that the World Health Organisation has discouraged the use of antibiotics on animals since 2017.

"We saw an opportunity to develop an alternative for animal antibiotics and are developing quality products focusing on gut health management, such as Orgacids Revolution. The product is a new-generation antimicrobial acidifier to provide an effective alternative solution to antibiotic growth promoters. We anticipate that these products will do well in the market," Teo said.

Teo said if the local Health Ministry decided to also ban the use of animal antibiotics, it would be a good opportunity for the group to showcase its product invention.

Sunzen is also introducing Optishield, a new product aimed at combating the recent outbreak of virus faced by some local farms.