The Recent Update By AU8 Could Not Impress The Investors- The Share Price Tumbled By 2%

The Recent Update By AU8 Could Not Impress The Investors- The Share Price Tumbled By 2%

Aumake International Limited (ASX: AU8), a company from retailing industry which is into the e-commerce business of connecting the suppliers based in Australia with the customers in China has announced its exclusive agreement with JD Worldwide. The update provides a piece of additional information on the previous announcement of this strategic agreement.  As per the earlier announcement, AU8 has entered into a strategic agreement with JD Worldwide, a cross-border division of JD.com which is a leading Chinese e-commerce platform.

Through this partnership, AU8 will be able to reach the Chinese customers to sell the products which get manufactured in Australia and New Zealand. On the other hand, JD platform will be supporting AU8 to the maximum extent to generate an initial sales target of A$2 million per month with a potential to grow exponentially. Alibaba’s TMall and Chemist Warehouse through their exclusive relationship with JD Worldwide could successfully mirror their arrangement which includes all the benefits to reach to their target audience and improve the financial performance. Keeping this in view, AU8 is also developing its e-commerce business through a multi-channel platform which will lay a foundation for generating a sustainable growth margin of 25-30% within one year. Following this agreement, the company provides additional information to the investors and shareholders about JD.com’s 2017 revenue of US$55.7 billion which makes JD.com as the largest retailer in China through both online and offline platform.

There is no change in the previous strategic agreement, consequent intentions and the revenue expectations within 12 months duration.

The official listing date of AU8 an ASX is 7 December 2011. Since its listing on ASX, the performance of the company remains negative. In the last five years, the performance of the company was -99.71%, and in the previous 1-year, the performance of the company is -62.41%.

For the FY2018 ending on 30 June 2018, the company incurred a net loss of $11,232,861. The balance sheet of AU8 gives a healthy look as the company has maintained a net asset base of $17,189,368 which indicates that the company holds a position to meet long-term obligations. Also, the debt to equity ratio is 0.19 which suggests that the company tries to meet the financial requirements from within the resources and the assets instead of approaching any external financial support. The company owns a total current asset of $15,205,050 and a total current liabilities of $3,221,567 which indicates that the company can efficiently manage the net working capital and also capable of clearing its short-term obligations. However, FY2018 highlights an increase in the accumulated losses which indicates a weak operating performance of the company and can adversely impact the investors and the shareholders of the company. The total shareholder’s equity is worth $17,189,368. The net cash and cash equivalent by the end of FY2018 are $10,737,214.

At present, the market price of the share is A$0.245 which is 0.005 points below the previous trading day’s closing price which is towards 52 weeks low price. The stock holds a market capitalization of A$67.86 million.


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