Should you invest in Bubs Australia shares?
- ruby457
- Nov 25, 2019
- 1 min read
November has been a big month for Australian infant nutrition product manufacturer Bubs Australia Ltd (ASX: BUB). The company announced 2 potentially lucrative new deals this month: one with Chinese e-commerce giant Alibaba, and the second with Vietnam’s largest baby products retailer, Bibo Mart. Growth investors will be left disappointed though: despite these 2 big announcements, the company’s share price has barely budged.
What do these deals mean for Bubs? On paper, both deals look like big wins for Bubs. The deal inked with Alibaba is part of a broader push by the Chinese company to help international brands enter the Chinese market. As part of the strategic agreement, Bubs will launch a new premium adult goat dairy brand called “Deloraine”, which will be distributed across Alibaba’s online marketplace. The deal gives Bubs access to over 700 million active users and the company expects to ship $10 million worth of its goat dairy products in the first year of the agreement. According to Bubs’ announcement, the market for goat dairy products in China is estimated at $2 billion, so there is the potential for rapid revenue growth.
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