Wattle Health Australia Ltd

Received its first paid order from a distributor in Macau: Wattle Health Australia Ltd (ASX: WHA) has received its first paid order from a distributor in Macao Special Administrative Region of the People’s Republic of China (Macau) purchasing WHA’s entire nutritional dairy range. Macau is a large tourism market and has the geographic proximity to China, that makes Macau an excellent opportunity with respect to WHA’s aim to increase sales and exposure in Asia. Further, WHA has also received its first order, with deposit paid, for WHA’s 100% natural baby food range using all Australian fruit and vegetables from Vasudevan and Sons Exim Private Limited in India. Therefore, WHA’s products are now available in India and China, two of the most populated countries and with the fastest growing infant market. Moreover, for the month of January, WHA gross sales were $329,000, which is 35% of sales for FY17 and 61% of sales in the December quarter. Additionally, in the second quarter of FY18, WHA’s cash receipts were of $540,027.94, which represented 58% of total sales for FY17. At the end of the second quarter, WHA has a cash balance of more than $9.6 million with no debt and inventory at cost of circa $1.2 million. In addition, WHA had secured distribution for its infant formula range with API, which will be launched in February 2018. Therefore, this partnership will see WHA’s infant formula range stocked nationally throughout the Australian pharmacy retail market for the first time. On the other hand, WHA had successfully applied in November to obtain accreditation with CFDA of WHA’s conventional cow infant formula range, which got accepted. However, WHA has not received any notification from the relevant authorities of any issues or foreseeable delays but WHA is confident of obtaining it soon. Meanwhile, WHA stock has already risen 50.62% in three months as on February 02, 2018 but plunged 6.15% on February 05, 2018 with the overall market downtrend scenario. We give an “Expensive” recommendation on the stock at the current price of $2.29
 

Bubs Australia Ltd

Bubs Goat Milk Infant Formula to be ranged in Woolworths supermarkets: Bubs Australia Ltd (ASX: BUB) stock rose before edging a little low on February 05, 2018, after its goat milk infant formula product has been announced to be ranged in selected Woolworths supermarkets. Therefore, all three stages of Bubs Advanced Plus+ goat milk infant formula will be available in selected Woolworths supermarkets from April. BUB is targeting consumers in key metropolitan areas with high penetration of infant formula customers. On the other hand, BUB in the second quarter has completed the acquisition of NuLac Food and became the only vertically integrated producer of goat milk infant formula in Australia. Further, Bubs Australia has acquired 49.9% ownership stake in the dairy processing facility that manufactures NuLac Foods products, and has signed a long-term milk supply agreement, which will provide exclusive access to Australia’s largest herd of 6,500 milking goats, producing more than half of all Australia’s goat milk. Moreover, at the end of the second quarter, BUB has a cash reserve of A$8.7 million. The second quarter gross sales grew 79% to $1.989 million and the second quarter gross profit increased 114% YTD, against comparable period last year. Additionally, during the second quarter, BUB had raised A$15 million (before costs) from an institutional share placement and raised A$5 million (before costs) from Share Purchase Plan to partially fund the acquisition of NuLac Foods and 49.9% interest in their dairy production facility. However, given the trading levels, we believe the stock is still “Expensive” at the current price of $0.72

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