Market Promising Analysis

Introduction

Market analysis is a crucial step in assessing the practical application value of Versatobacco.

Through the results of FBA and wet-lab experiments, we have validated the feasibility of Versatobacco in synthesizing caffeoylmalic acid and resveratrol via the shikimate pathway, and crocetin via non-shikimate pathways.

Through dynamic Flux Balance Analysis (dFBA), we have obtained the accumulation models of caffeoylmalic acid, resveratrol, and crocetin over time. <<< See details

Through corporate research, we have acquired key data on the costs of related instruments and consumables, management and maintenance costs, and market prices of the compounds within the industry chain. <<< See details

In this chapter, we will analyze the profitability of producing different compounds with Versatobacco based on the conclusions and data above, identifying profitable time periods and the optimal timing for maximum profit, while assessing the risks involved.

Assumptions

• laboratory with basic equipment and technology for production is already available.
• For mass production, the transfection method for the leaves is stable, with maximum production visible in approximately 2-4 weeks.
• The analysis subject is consistent with FBA, targeting 1700gFW of leaves (approximately 2m²).

ROI Analysis

We first model the Return on Investment (ROI) for the production of the target compound in the HQT knockout model. The ROI is calculated using the following formula, which indicates the value returned from an investment, i.e., the economic return a business gains from an investment activity. It requires the calculation of costs (C) and profits (P):

$$ ROI(\%) = \frac{P}{C} \times 100\% \tag{1} $$

Costs can be divided into fixed costs and changeable costs. Through industry research, we consider that fixed costs mainly arise from production materials, leaf transfection, and product purification (S.M.1), while changeable costs include the total expenses for labor management of 2m² of tobacco leaves per hour and the maintenance of the cultivation environment.

Fixed Cost: $$ FC = c_{mat} + c_{trans} + c_{puri} \tag{2} $$

Changeable Cost: $$ c(t) = c_h \cdot t \tag{3} $$

Total Cost: $$ C = FC + c(t) \tag{4} $$

Income is generated from the sales of caffeoylmalic acid, resveratrol, and crocin at different time points:

$$ I = p_0 \cdot q(t) \tag{5} $$ where \( q(t) \) is the function of metabolite concentration over time.

Thus, the profit at different time points is:

$$ P = I - C \tag{6} $$

Parameters

Here is a selectable table!

Here is a selectable table!

Here is a selectable table!

Results

For the simulation results of 2m2 tobacco leaves, Versatobacco can generate a profit from production of resveratrol between 13-29 days with a positive ROI (fig.1). The ROI value reaches its maximum around 399h (day 16), indicating that harvesting the tobacco and extracting resveratrol at this point would yield the highest profit margin (fig.1).

Risk-Return Analysis

After identifying the optimal time for maximum ROI, we still need to assess the risk associated with the returns at that time. In practice, metabolite yields may vary due to slight differences in tobacco batches, cultivation environments, etc., and prices may fluctuate due to company differences and market demand.

To address this, we take the time \( t^* \) where ROI is maximized and the corresponding product accumulation \( q^* \). At this value, we use the Monte Carlo algorithm to simulate the fluctuations in returns caused by random factors. Since resveratrol is the most marketable of all our products, we will primarily conduct a risk simulation for it.

The product price and yield will follow a normal distribution around \( p_0 \) and \( q^* \), respectively:

$$ p = p_0 + \epsilon_p, \ \epsilon_p \sim N(0, \sigma_p^2) \tag{7} $$

$$ q = q^* + \epsilon_q, \ \epsilon_q \sim N(0, \sigma_q^2) \tag{8} $$

The technical success rate follows a binomial distribution, which will impact the final yield:

$$ s = \frac{s_0}{N}, \ s_0 \sim B(N, P) \tag{9} $$

Thus, the net cash flow at different time points is calculated as the inflow minus the outflow:

$$ CF(t) = s \cdot p \cdot q - C \tag{10} $$

Net Present Value (NPV) refers to the difference between the present value of cash inflows and the initial investment, discounted at the cost of capital. In our model, we set a fixed initial investment I0 to cover all expected project expenses.

$$ NPV = \sum_{t} \left[ \frac{CF(t)}{(1 + r)^t} \right] - I_0 \tag{11} $$

If the NPV is greater than zero, the project is feasible; the larger the NPV, the more favorable the project, and the better the investment returns.

Parameters

Here is a selectable table!

Here is a selectable table!

Here is a selectable table!

Results

Based on the analysis results, harvesting tobacco and purifying resveratrol at the moment of maximum ROI yields an expected profit of 318 RMB, with a probability of approximately 77.57% that the net present value (NPV) will be greater than zero (fig.2). This indicates that our plant chassis has a high probability of profitability in resveratrol production, demonstrating potential for market application.

Supplementary Materials