Bubs is a rapidly-growing infant formula business which specialises in goat milk products.
The Bubs share price has drifted lower by 15.5% since 24 August 2020 to $0.82. Since then it released its FY20 result and also announced a capital raising.
I thought the FY20 result was quite impressive. Full year revenue was up 32% to $62 million, infant formula revenue grew 58% to $30 million. The ASX share showed that Chinese revenue grew 32% to $13 million and export revenue outside of China increased by five-fold. That ex-China export revenue represented 10% of group revenue.
The normalised gross profit margin increased from 21% to 24% and it is going for a locally-produced manufacturing option (with Bubs’ ingredients) in China with joint venture partner Beingmate. Part of the capital raising money will be used to buy a stake in the Chinese manufacturing facility.
Bubs has a lot going on, I can understand the market uncertainty. But there are plenty of positives. It’s launching new products, including a vitamin and mineral range. It now has a global brand ambassador. It’s growing in multiple markets.
I’d be happy to buy a parcel of Bubs shares at the current share price.
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