Zhihe Bio Files IPO Prospectus: Pioneering Full-Lifecycle DHA Innovation Beyond Price Wars

“DHA is not exclusive to infants and young children; it is a cognitive fuel station for the entire life cycle.” This statement by Guo Dongsheng, Chairman of ZhiHe Biotechnology, reveals a long-overlooked nutritional truth.

As a critical nutrient throughout the entire human life cycle, the biological functions of DHA are deeply embedded in every process of development and aging. As a core structural component of brain gray matter and the retina, DHA accounts for more than 20% of total brain lipids. It acts as an information superhighway between neurons, supporting signal transmission within the brain's gray matter. This role begins at the very start of life: adequate DHA supply is indispensable for neural development during the fetal and infant stages. In the visual system, DHA constitutes over 50% of the photoreceptor cell membranes in the retina, with its levels directly influencing visual acuity. As individuals age, DHA plays a significant role in preventing chronic conditions such as Alzheimer’s disease and cardiovascular diseases.

Although many people are accustomed to supplementing DHA by “taking fish oil,” fish do not actually synthesize DHA themselves; they obtain it by consuming algae. Thus, we are essentially benefiting indirectly from the biochemical prowess of marine algae. In recent years, the maturation of microalgal fermentation technology has enabled humans to bypass the food chain and obtain higher-purity DHA directly from microalgae.

As global health awareness continues to rise, the market demand for DHA is steadily increasing, with the global market size projected to reach $50 billion by 2030. However, China’s functional oils and fats industry has long faced a “double squeeze”: on one hand, foreign companies dominate the market, with most DHA products on the market sourcing raw materials from overseas manufacturers; on the other hand, domestic consumers have low trust in domestically produced health supplements, causing the supply chain, despite its maturity, to often fall into price wars.

The key to breaking through in the industry lies in mastering proprietary technologies and delivering differentiated, high-value-added products. This is precisely where ZhiHe Biotechnology begins. Leveraging its partnership with Nanjing Normal University, ZhiHe Biotechnology is pursuing a rigorous strategy of “intensifying technological innovation, enhancing product quality, and expanding application scenarios,” aiming to reshape the landscape of China’s domestic functional oils and fats industry.

At its inception, the team at ZhiHe Biotechnology recognized that despite the rapid development and continuous breakthroughs in domestic biomanufacturing technology, many Chinese consumers still place greater trust in international brands within the high-end functional nutritional food sector. This phenomenon reflects the dual shortcomings of domestically produced functional oils in both cutting-edge technology and market perception.

“We possess research and development technologies that are at the international forefront, and we have received national-level awards. We do not wish for these technologies to remain confined to the laboratory, nor do we want to see them mired in price wars within the low-end market,” stated Guo Dongsheng, Chairman of ZhiHe Biotechnology. Guided by this original aspiration, ZhiHe Biotechnology has established a strategy of “upward competition”—eschewing low-price rivalry in favor of continuously raising technological barriers and developing new products with high added value, thereby steering the industry toward a virtuous, value-driven path of development.

Meanwhile, the ZhiHe team is driven by a sense of mission to contribute to the nation through industrial development. “We aim to boost consumers’ confidence in domestically produced functional oils and fats, and build a national brand of our own,” emphasized Guo Dongsheng. He highlighted that ZhiHe’s goal is not only to translate advanced scientific achievements into health products that benefit the general public, but also to fundamentally change consumers’ stereotypes about domestic brands, thereby rebuilding their trust and recognition of Chinese-made functional nutritional products.

According to China’s Catalogue of New Resource Foods, only three algal species—Schizochytrium sp., Ulkenia sp., and Crypthecodinium cohnii—are currently approved for DHA production. Among these, Schizochytrium has emerged as the “star strain” in the DHA industry, owing to its significant advantages of rapid growth and high lipid content.

However, the path to industrialization—from laboratory shake flasks to industrial fermentation tanks with capacities of hundreds or even thousands of tons—is fraught with challenges.“Many synthetic biology companies focus solely on how much oil (product) their strains can produce, while neglecting how to efficiently and cost-effectively extract the oil (product) from the fermentation broth and ultimately convert it into a marketable commodity.”Guo Dongsheng pointed out the crux of the matter. It is precisely for this reason that “fermentation scale-up” and “product separation” have become two major technological chasms standing in the way of many startups on the eve of mass production.

ZhiHe Biotechnology has selected *Schizochytrium* as its core chassis cell. Leveraging over two decades of research accumulation in microbial manufacturing by an academician-led team, the company has successfully achieved a full-loop technological closure for non-model microorganisms, spanning strain breeding, metabolic regulation, and industrial scale-up. Furthermore, it has cultivated a specialized technical team dedicated to industrial scale-up, thereby bridging the "last mile" from "production capability" to "stable delivery."

ZhiHe Algal Oiland Factory Photos

Currently, ZhiHe Biotechnology has established fermentation and refining production capacities of 7,000 tons per year in Shandong and Changzhou. In ZhiHe’s fermenters, the dry cell weight density of Schizochytrium exceeds 200 g/L. “What does this mean? The dry matter content of Chinese cabbage, a common vegetable in our daily diet, is only 12%–15%,” Guo Dongsheng vividly illustrated. “Our fermentation broth is even more ‘concentrated’ than the ‘dry matter’ of vegetables, with over 50% consisting of lipids.” This provides a solid foundation in terms of cost and production capacity for the domestic substitution of DHA in China.

In addition to achieving efficient mass production, ZhiHe Biotechnology has directly addressed the “fishy odor” issue, which is of greatest concern to consumers. Through process innovation, the team categorized the fishy off-flavor into two distinct sources: “olfactory fishiness” (detected by smell) and “gustatory fishiness” (detected by taste), and developed targeted solutions for each. Volatile compounds responsible for the olfactory fishiness were effectively removed through high-vacuum refining, while the irritating mouthfeel lingering on the tongue was addressed by optimizing the upstream degumming process. This approach achieved a high-quality breakthrough in algal oil, characterized by the absence of both olfactory and gustatory fishiness, thereby providing a superior foundation for end-product experience.

ZhiHe Biotechnology has taken the lead in breaking the traditional perception that “DHA is exclusively for infants and young children,” promoting it as a core nutrient covering the entire life cycle. In-depth research conducted in collaboration with institutions such as Nanjing Normal University has confirmed that DHA undergoes dynamic metabolic processes in the human body, necessitating continuous supplementation across all age groups.

In terms of product selection, ZhiHe Biotechnology focuses its differentiation strategy on high-value, highly absorbable, and innovative formulations. Its product portfolio includes DHA algal oil with concentrations of 40%, 50%, and 60%, EPA algal oil for vegetarians, and highly bioavailable phospholipid DHA algal oil, which is scarce in the market. Its target customer base has gradually expanded from infants and pregnant women to adolescents, adults, and the elderly.

Furthermore, to address the issues of strong fishy odor and difficulty in swallowing associated with traditional DHA capsules, ZhiHe Biotechnology has launched innovative DHA burst beads. With their refreshing orange aroma and crisp texture, these beads make nutritional supplementation a more enjoyable experience. Portable formulations such as nanoemulsion DHA are also under development, aiming to make DHA supplementation more convenient and part of daily routine.

In Guo Dongsheng's view,The DHA industry has gradually completed the transition from the “fish oil era” to the “algae oil era,” and will next enter the “algae oil product era,” characterized by high-potency, pharmaceutical-grade formulations., and this is precisely the key focus for ZhiHe Biotechnology's next steps.

In terms of product planning, ZhiHe Biotechnology will focus on“High Purity, High Potency, High Absorption”Advancing in Three Key Directions: First, launching natural DHA algal oil and algal-derived EPA oil with 70% content, breaking through the current mainstream concentration range; second, deploying high-value products with clear functional advantages, such as phospholipid-type DHA, aqueous-solution DHA, and microencapsulated powders; third, leveraging chassis cells such as Schizochytrium to extend the technology platform into broader areas of biomanufacturing, including algal-derived proteins and natural pigments.

“Our greatest competitor is not our peers, but the speed of generational change,” Guo Dongsheng candidly stated. He noted that the product innovation cycle in the fermentation sector is short, with “homogenized competition often emerging within a year.” Only through continuous innovation can companies navigate these cycles, and only by translating technology into dividends that improve human life can enterprises achieve enduring success.ZhiHe Biotechnology will continue to iterate its technologies and develop new products, while also targeting products that have been theoretically validated but not yet industrialized, constantly launching new offerings that align with market demands to build dynamic competitive barriers.

As the name “ZhiHe” implies—rooted in “lipids” as its industrial foundation, with “grain” symbolizing vitality and protection. With increasingly comprehensive international certifications and a continuously expanding product portfolio, ZhiHe Biotechnology is poised to carve out a Chinese path driven by technological innovation for value growth amid intensifying competition in the functional oils and fats sector.