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ASX Infant Formula Space


By
Team Kalkine - July 26, 2019

Bubs Australia Ltd

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Strategic Channel Partnership with Kidswant:


On 27 June 2019, Bubs Australia Ltd (ASX: BUB) had signed a strategic channel partnership with Kidswant, who holds the largest market share of mother and baby retail in China. Bubs/Beingmate JV known as Bubs Brand Management Shanghai Co. Limited, was formed in May 2019 and this is their first important project. BUB’s Organic ® food items would be now sold in two hundred and seventy-five Kidswant outlets.


This will be available in key shopping areas across 123 cities all over China. It is projected that the annual retail sales of Bubs^® products through the channel Kidswant would be approximately of RMB 30 million by FY20. Kidswant has a reach in ~60% of the cities in China and has a turnover of more than RMB 10 billion (A$2 billion).


Source: Company’s Report



Meanwhile, the company informed the market, on 6 May 2019 that it had formed three important partnerships to establish its presence in China. The company had formed a Joint Venture with Beingmate Baby & Child Food Co., Ltd, signed the Strategic Partnership Agreement with Alibaba’s Tmall and has formed the equity linked alliance with CW Retail Pty Ltd, CW Management Pty Ltd, and CW Retail Services Pty Ltd (collectively called Chemist Warehouse).


Further, the company notified that it had signed a supply agreement with Fonterra Australia to produce Bubs Organic® new infant formula range, which is a certified organic grass-fed infant formula made in Australia.


On the other hand, for the third quarter report for the period ended 31 March 2019, the company had reported 103% in the total revenue to $11.83 million on pcp. China’s sales had grown by 884% in the third quarter and formed 20% of the total company’s revenue, while the domestic sales had also grown by 71% in the third quarter on pcp, and forms 79% of the company’s revenue. Also, 1% of the company’s revenue comes from export.


Meanwhile, BAL’s stock has given a return of 205.68% in the last six months and in the last month period the stock gave a return of 43.85%. The company has a market capitalisation of A$685.4 million, with ~509.59 million outstanding shares. BUB’s stock last traded at A$1.375, up by 2.23% from its prior closing price (as on 25 July 2019).