Is JAT creating a MONSTER, page-131

JAT appears to be definitely moving in the direction of creating a “Monster” conglomerate company IMO. Now with four profitable subsidiary’s and Jat-Oppenheimer showing signs of moving to profitability as well.

Obviously an important part of this growth for JAT is their advertising budget and use of these funds.

The FY 2018 annual report shows after a pullback to transition, JAT achieved $2.3mil revenue, $84,000 gross profit and all of that gross profit spent on advertising & marketing expenses.

JAT’s products are in there introduction stage, the company has to keep the budget high to make place in the market with the existing players and to have frequent advertisements. As the time goes on and product becomes older, the advertising budget can come down as then the products don’t need frequent advertising.

The FY 2019 annual report shows after the transition JAT achieved $66.4mil revenue, $6.75Mil gross profit and a spend of $604,000 on advertising & marketing expenses. Part of this revenue gain was due to this increase in advertising spending.

A large portion this budget was invested on the exhibit at the inaugural 2018 CIIE with great effect as large distribution agreements were achieved.

Funds were also invested on train, TV and online advertising.



The FY 2020 advertising investment has included the 2019 CIIE. JAT was able to display a much larger variety of merchandise including extended products under brand names and new products in different food categories. Existing distribution agreements were increased and new agreements were entered into. The recently announced agreement for new plant based meat substitutes could be credited to Introduction of this at the CIIE.



New advertising videos were created for Chinese TV and to place on distributer websites.

Now we have a world-famous Australian actor, Christopher Pang, joining JAT as a brand ambassador. Chris will undertake personal appearances, photo sessions and endorsement activities on behalf of JAT. Infant formula sales, in particular should benefit from this.



In summary JAT’s FY 2020 advertising investment will probably exceed $1mil. The increase is only a small portion of the expected gross profit increase as a result of this initial push. The normal budget is about 5% of an expected revenue increase resulting from advertising. As JAT’s margins increase in coming years this could be looked at again, but for now IMO JAT has this about right at about 1%

GLTAH DYOR.