Bubs Australia’s Share Price Soars 22% on Chinese Partnership

By ,

Bubs Australia Ltd [ASX:BUB] is today the beneficiary of positive investor sentiment after the announcement of a strategic channel partnership between Bubs and Kidswant, a prominent baby retail chain in China.

Bubs Australia markets itself as a manufacturer of premium infant formula and nutrition products based entirely on goat’s milk.

At time of writing, shares for the infant formula company have risen 22.58% to $1.14.

Why the partnership with Kidswant?

Kidswant is described in the release as an ‘innovative data and consumer relations’ service provider with a place as the ‘market leader in infant and child retail with the largest market share in China.’

The subsequent partnership means that Bubs will now be able to sell its range of Bubs Organic food products in all 275 Kidswant stores, based throughout 123 cities on the mainland.

As you might imagine, this opens the door to a fairly large and active community, which the company believes to be around ‘27 million mothers’.

The company estimates that the deal could result in an annual retail sales performance of AU$6.25 million for FY2020.

10/10 for opportunity

Aside from 275 large-scale physical stores, Kidswant also operates online shopping channels, a mobile terminal APP, and a specialised parenting and purchasing consulting service.

Given that their current turnover stands at AU$2 billion annually, with clear room to grow, Bubs seem well-placed to profit from the deal.

It also means that the company will have access to a ‘trusted ecosystem’ with one of the largest markets in the world, as well as an audience who have placed their trust in Australian products.

This was sorely needed for Bubs, which has felt the effects of the recent trade war in a competitive market with big players like The a2 Milk Company Ltd [ASX:A2M] and Bellamy’s Australia Ltd [ASX:BAL].

Regards,

Ryan Dinse,
For Money Morning

PS: If small-caps like Bubs Australia spark your interest, we recommend that you check out our brand-new Money Morning report: Three Small-Cap Stocks to Own Right Now’. Download for free here.

About Ryan Dinse

Ryan Dinse is an Editor at Money Morning.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

With an academic background in economics, he believes that the key to making good investments is investing appropriately…

Bubs Australia [ASX:BUB] Shares Rise on ‘Material’ Guidance Upgrade

On Friday, Bubs Australia [ASX:BUB] has released a ‘materially’ updated guidance for FY22.

Bubs Shares Soar 10% on Walmart Supply Deal

Infant formula stock Bubs Australia [ASX:BUB] shares climbed on Thursday after a supply agreement with large US retailer Walmart.

Bubs Australia Shares Rise on More US Supply News

Meta-description: Baby formula manufacturer Bubs Australia [ASX:BUB] has provided further details on its US supply deal, naming two of its new major US suppliers, Kroger and Albertsons. BUB shares were up 8% in late afternoon trade on Friday while the benchmark ASX 200 traded 1.2% down. The infant formula stock — riding the positive news … Read More

Bubs Australia [ASX:BUB] Shares Rise on US Infant Formula Update

Bubs Australia [ASX:BUB] shares rose on Thursday after further updating the market regarding its emergency formula imports to the US.

Bubs Shares Surge on US Baby Formula Rescue Mission (ASX:BUB)

Bubs Australia [ASX:BUB] rose as high as 77% on Monday after signing an emergency supply deal to aid the US infant formula shortage.

Bubs Australia Shares Rise On A2 Product Launch (ASX:BUB)

Bubs Australia is coming for A2 Milk, launching its own A2 beta-casein protein infant formula product.