I disagree.They need $10M by 7 October.They won't get it without...

First 597 Last

Share
Profile

Follow
prosperity

9,673 Posts.

954

01/10/20

22:33

Post #: 47791712
Share

Originally posted by takizawa2: ↑

Could the Bubs (ASX:BUB) share price be an A2 Milk (ASX:A2M) contender?

September 30, 2020 11:47am | More on: BUB

The A2 Milk Company Ltd(ASX: A2M) share price slumped 10% on Monday following an earnings downgrade. Could this be an opportunity for investors to jump on board the Bubs Australia Ltd(ASX: BUB) share price?

Bubs share price performance

Even after this week’s selloff, the a2 Milk share price is a little higher than breakeven for the year. By comparison, the Bubs share price is down nearly 23% in 2020. Bubs is likely weighed down by its $40 million capital raising that took place earlier this month. The capital raising offered a placement of up to $28.3 million at 80 cents per share and share purchase plan of up to $10 million at the same price. The significant discount combined with the broader market sell off is likely to have pushed the Bubs share price lower in September.

FY20 performance

Bubs delivered a fair FY20 performance with a 24% increase in revenue to $54.6 million and a normalised earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $9.1 million. The company’s growth was fuelled by strong infant formula growth with sales up 58%. The contribution share of infant formula earnings now represents 55% of the company’s earnings, up from 30% two years ago.

Moving forward, China remains a key focus as the company’s primary export market with the highest growth potential for goat’s milk infant formula. Furthermore, it plans to diversify its China dependency risk with new market launches including Vietnam and Hong Kong in FY20 and Malaysia and the Middle East in Q2 FY21.

Key risks

The Bubs FY20 results highlighted similar challenges that a2 Milk faced with regards to pantry stocking. Its report cited that significant pantry stocking “brought forward demand” with “Australian domestic consumption from local consumers now returning to pre-COVID levels”. In light of such concerns, it did mention that increasing demand was evident in China and that cross border e-commerce (CBEC) China sales were growing.

It further highlighted the barriers to entry for businesses in China, especially for infant formula. Tightening regulations and long lead times for regulatory approvals all impose risks for Bubs’ success in China. Furthermore, consumers increasingly want to see a brand’s local relevance, increasing the need for Bubs to invest in marketing and sponsorship in China.

Foolish takeaway

Following its capital raising, I believe Bubs is in a solid position to capitalise on its growth initiatives and kickstart China-related operations.

Expand

I disagree.
They need $10M by 7 October.
They won't get it without a cracker of an announcement and it is must be tomorrow so people can arrange to transfer funds.

The SPP is doomed. DYOR.

BUB Price at posting: 73.0¢ Sentiment: Sell Disclosure: Held
3 Upvote

0 Great analysis

Reply

Top Stories

PTX

Prescient Therapeutics CEO highlights PTX-100 progress in RAS-Driven cancer trial

ASX Market Open: Grand Nvidia comeback turns into 'sell' signpost for traders | June 26

Listen: HotCopper Wire Podcast 014 – Abu Dhabi wants to buy our 'true' oil and gas gem

BPH

Australia’s gas crisis is here – and dying coal plants aren’t helping

ASX Market Close: Index flat as miners fall | June 25, 2025

First 597 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

(20min delay)
Last 16.5¢		Change 0.000(0.00%)		Mkt cap ! $147.3M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

Buyers (Bids)

No.	Vol.	Price($)
1	7000	16.0¢

Sellers (Offers)

Price($)	Vol.	No.
16.5¢	1325230	28

View Market Depth

No.	Vol.	Price($)
1	7000	0.160
27	1770962	0.155
29	1638506	0.150
14	1401974	0.145
15	410914	0.140

Price($)	Vol.	No.
0.165	1339144	28
0.170	2926057	33
0.175	635330	16
0.180	395140	19
0.185	1149627	9

Last trade - 09.39am 26/06/2025 (20 minute delay)

BUB (ASX) Chart

Day chart unavailable

I disagree.They need $10M by 7 October.They won't get it without...

Prescient Therapeutics CEO highlights PTX-100 progress in RAS-Driven cancer trial

ASX Market Open: Grand Nvidia comeback turns into 'sell' signpost for traders | June 26

Listen: HotCopper Wire Podcast 014 – Abu Dhabi wants to buy our 'true' oil and gas gem

Australia’s gas crisis is here – and dying coal plants aren’t helping

ASX Market Close: Index flat as miners fall | June 25, 2025

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

I disagree.They need $10M by 7 October.They won't get it without...

Top Stories

Prescient Therapeutics CEO highlights PTX-100 progress in RAS-Driven cancer trial

ASX Market Open: Grand Nvidia comeback turns into 'sell' signpost for traders | June 26

Listen: HotCopper Wire Podcast 014 – Abu Dhabi wants to buy our 'true' oil and gas gem

Australia’s gas crisis is here – and dying coal plants aren’t helping

ASX Market Close: Index flat as miners fall | June 25, 2025

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News