[Asia Economy Reporter Hyungsoo Park] EasyBio's stock price is on the rise. As the war between Russia and Ukraine prolongs, the phenomenon of 'agflation'?general inflation driven by a sharp rise in agricultural product prices?has emerged, which appears to have caused a surge in feed-related stocks.
As of 10:35 AM on the 22nd, the stock is trading at 7,980 KRW, up 9.47% from the previous day.
From the 14th, over seven trading days, Hanil Feed's stock price rose approximately 340%, jumping from a closing price of 2,955 KRW on the 13th to 12,950 KRW. On this day as well, feed-related stocks including Korea Industries surged, which is interpreted as increasing interest in EasyBio.
EasyBio was established in May 2020 through a spin-off of the additive and piglet feed business divisions from its holding company Easy Holdings. Its main business is the manufacturing and sales of feed additives and piglet feed. Key products include AiOne, a piglet feed, and feed additives such as Lipidol and Probvax. Last year, it recorded sales of 129.5 billion KRW and operating profit of 16.8 billion KRW. By business segment, the feed division and additive division posted sales of 71.5 billion KRW and 60.8 billion KRW respectively, with operating profits of 5.2 billion KRW and 10.9 billion KRW.
EasyBio holds a diverse product portfolio including Lipidol, an absorption enhancer to improve feed conversion ratio, and Probvax, an antibiotic alternative, enabling it to respond to environmental changes that are issues in the livestock industry. Cost-saving additives (enzymes and emulsifiers) see increased demand when international grain and raw material prices rise.
As of 2019, the global feed additive market size was approximately 42 trillion KRW. It is expected to reach 60 trillion KRW by 2025. EasyBio produces key products such as microbial agents and extracts (plant-based herbs) used as antibiotic alternatives. The markets for antibiotic alternatives including Eubiotic, microbial agents, and organic acids are the largest, valued at 7.22 trillion KRW, 5.52 trillion KRW, and 3.47 trillion KRW respectively. Enzymes, a cost-saving additive and one of EasyBio’s main products, formed a market size of 1.32 trillion KRW as of 2019. According to data compiled from Market and Markets, the overall additive market is estimated to grow at an average annual rate of 6.10%. Enzymes, extracts (plant-based herbs), Eubiotic, and microbial agents are showing higher growth rates than the average for all additives.
The feed additive business is based on biotechnology fields such as fermentation engineering, enzyme engineering, life sciences, and genetic engineering, applying the applied field of animal nutrition to ultimately provide consumers with safe meat products. It is recognized as the highest value-added business in the value chain. Feed additives improve gut health and promote growth in livestock in line with the global trend toward eco-friendly, antibiotic-free meat production. By enhancing the digestion of various nutrients in feed, they enable resource savings and cost reductions, evolving toward producing safe food. Demand for cost-saving additives (enzymes and emulsifiers) increases when international grain and raw material prices rise.
NH Investment & Securities analyzed in last month’s report titled 'Grain Price Fluctuations and Food & Beverage Industry Impact Review' that feed additive companies such as CJ CheilJedang and EasyBio are likely to benefit in the short term because they can quickly pass on international grain price increases to their sales prices.
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