Specialty Natural Products Public Company Limited (SET: SNPS) will soon be available for trading in the Stock Exchange of Thailand (SET) under the personal and medical supplies (PERSON) sector on 29 November 2024. The company had a huge success in the initial public offering (IPO), seeing all 105 million shares fully subscribed at the offering price of THB 4.20 per share.
SNPS operates an all-in-one business
SNPS is a business that sells herbal products and provides a one-stop solution for its customers. It has incorporated local expertise with technological innovation to meet the demands of modern customers.
SNPS consists of two major businesses as follows:
- The manufacturing and distribution of standardized herbal extracts.
- Offering product development and manufacturing of health, beauty, and hygiene products, which consist of two-component
- Manufacturing and distribution of products under consumer brands (Original Design Manufacturer: ODM).
- Manufacturing and distribution of products under the brand of the company’s group (Original Brand Manufacturer: OBM).
Three-year plan for growth.
Among its competitors, SNPS has the following distinctions and advantages that make the company stand out:
- All-in-one product delivery and services
- Capability of manufacturing a product with global standard
- Expertise and innovation in herbal product development
- Creating connections between business partners, customers, and raw material dealers.
- Experience team of executives, and more than 15 years of expertise in the herbal industry
Meanwhile, the overall perspective on the herbal industry is expected to have a compound annual growth rate (CAGR) at 5.6%. In 2026, the international market would be worth $71 billion, compared to 2023 when the market was worth $60 billion.
The market value of Thailand herbal market in the period of three years is expected to have a CAGR at 7.3%, which would push its value to THB 70 billion, compared to 2023 when the market is valued at THB 56 billion.
Expanding the business
The proceeds received from SNPS’ IPO, which totaled THB 441 million, would be used to invest in various parts as follows:
1. Investment in increasing extraction technologies to obtain more purification of the herbal extracts (SNPS Plant).
The company plans to invest further in new machinery, renovate and expand existing factory buildings to accommodate the mentioned machinery. Invest in related analysis equipment to enhance the herbal extraction from the existing machinery to produce herbal extracts that are more concentrated and purer.
These premium-grade extracts aim to meet the demands of international customers for use in the pharmaceutical and food industries.
The plan is expected to be finished within 2026, and would be using an approximate amount of THB 80-100 million of the proceeds.
2. Researching, developing, and producing herbal raw materials for pharmaceuticals derived from herbs, pharmaceutical products derived from herbs, and medical food products or special-purpose food.
The company’s group plans to develop and manufacture herbal raw materials for pharmaceuticals derived from herbs, pharmaceutical products derived from herbs, and medical food products or special purpose food, totaling five items to provide options for consumers with natural products to alleviate various conditions such as reducing blood sugar levels, balancing digestion, boosting immunity, and relieving dizziness and nausea.
The plan is expected to be finished within 2028, and would be using an approximate amount of THB 45-75 million of the proceeds.
3. Repayment of existing loans of the company’s group. The group will repay loans obtained from financial institutions with funds from the IPO.
The plan is expected to be finished within 2024, and would be using an approximate amount of THB 130 million of the proceeds.
4. Working capital for business operations for the Company’s group, which is expected to be finished within 2025, and would be using an approximate amount of THB 120.54-165.54 million of the proceeds.
These investments and spending would be utilizing around THB 420.54 million of the total proceeds.
20% revenue growth within 2024
In 2024, SNPS is forecasting a revenue growth of 20% from last year which saw total income of THB 368 million. During the first half of 2024, the company recorded a total income of THB 216 million, deriving from sales within its existing customer base and continuously increasing new customers.
Additionally, the company is seeking to expand its customer base in foreign markets. Currently, foreign customers account for 10% of its base, most of which are from Vietnam and Malaysia. In the future SNPS will be expanding mainly in the Asian market.
At present, SNPS’s revenue structure mainly consists of:
- Medical, cosmetic, and hygiene products accounted for 70.20% of total revenue, consisting of 65.48% ODM and 4.72% OBM.
- Extract products accounted for 29.80% of total revenue, of which 91% of them came from Thai customers and 9% from foreign customers. The company has expanded to more than 20 countries, but majority of the earnings come from Vietnam and Malaysia, which contribute 2.18% and 5.85% of the earnings respectively.