Bubs Australia Ltd

Highest quarterly sales revenue on record in the fourth quarter: Bubs Australia Ltd.’s (ASX: BUB) stock fell 0.68% on July 31, 2018 though the company for the June quarter has posted highest quarterly sales revenue due to growth in additional revenue streams for Bubs infant formula, CapriLac powder, and increased China cross-border eCommerce sales across the total product portfolio. During the fourth quarter 2018, the net sales increased 620% to $8.51 million and export sales to China grew 644% to $1.9 million on same period last year. The company’s domestic sales is strong as the new ranging of Bubs infant formula and cereals in Woolworths, and Bubs infant formula sales grew by 21.2% in Coles, which is the fastest growing brand in value over the last 26 weeks versus last year (Source: Nielsen Scan Sales Data as at 17 July 2018). Moreover, BUB made significant advances in China route-to-market strategy as it was nominated as one of three CFDA brand slots with Australia Deloraine Dairy, signed Merchant Agreement with Alibaba Group and signed long-term Supply Agreement with New Times Asia to supply Bubs and CapriLac products to up to twenty eCommerce platforms in China. Additionally, BUB raised $40 million through share Placement to support growth, particularly in relation to China market development and new milk supply agreements. In addition, BUB reported for $38.6 million in cash reserves as at 30 June 2018. However, BUB stock has fallen 9.88% in three months as on July 30, 2018. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 0.725, while we will watch the stock going forward.
 

Wattle Health Australia Ltd

Fourth Quarter marked as a transformational period for WHA: Wattle Health Australia Ltd.’s (ASX: WHA) stock fell 3.6% on July 31, 2018 amidst trade related discussions and other regulatory risks. However, the company for FY 18 has reported 71% growth in gross sales. The company during the fourth quarter, has signed a minimum supply term agreement with International Supplies and Distribution Company Pty Ltd expected to get revenue of more than $100 million over 42 months. The company has also signed a fully funded transformational joint venture with Organic Dairy Farmers of Australia. Moreover, WHA has secured a distribution agreement with Metcash Trading for WHA’s Australian Natural Baby Food range. The company has appointed leading e-commerce provider, Quality Brands International Direct, to provide the company access to major export markets. WHA has also signed a minimum supply agreement with Chinese State-Owned Enterprise, Shandong Weihai Port International Trade Co. Ltd., amounting to revenue of $34 million over 36 months. Additionally, at the end of the fourth quarter, cash at bank is around $50 million with no debt. Therefore, WHA stock has risen 16.25% in one month and 33.5% in last five days, as on July 30, 2018. However, based on the foregoing, we give a “Speculative Buy” recommendation on the stock at the current price of $ 1.345.

 
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