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From the replies by Bioalpha on queries by Bursa Malaysia on 24 July 2020, both Guizhou Yuhexin Trading Ltd (“GYTL”) and Hainan Shifengfu Co. Ltd (“HSCL”) are privately owned entities with sole owner and director.  Aside from the below, not much of information that can be obtained on these 2 entities especially on their backgrounds, credentials and capabilities to supply health food and nutritional meals to public schools and hospitals in Guizhou province.

Guizhou Yuhexin Trading Ltd
Hainan Shifengfu Co. Ltd
Director / Shareholder
Wei Xuan Xuan (100%)
Xu Zhen Jie (100%)

The contract value of RMB700 mil (equivalent to RM426.7 mil) per year is commendable and it affirms Bioalpha’s maiden step to strengthen its presence in China. However, the backgrounds of the China partners and their abilities to deliver the amount as per the contract might raise some questions.
Hence, additional questions for the coming AGM on 17 August 2020:-
  1. What are the backgrounds of the two (2) Chinese companies? What are their experiences in delivering health food and nutritional meals to public sector?
  2. Kindly provide the brief summary of their financials
  3. How committed are these Chinese parties to the contract amount per year of RMB700 mil (equivalent to RM426.7 mil). What is the minimum guaranteed amount by these parties?
  4. Have the Chinese parties secured a contract to deliver nutritional meals to the public schools and hospitals in Guizhou prior to the signing of this contract?
  5. How the Company came into conclusion of thin gross profit margin of 3 to 5%. Kindly provide an operating profit margin as it is more relevant to understand the viability of the contract, after considering all the operating expenses.
Hope the Company can englighten its shareholders on the matters above in the coming AGM.
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