Shares of consumer staples company, The Food Revolution Group Ltd (ASX: FOD) sky-rocketed to set a new 52-week high of $0.195 on Wednesday, 28 November 2018. In today’s trading session, FOD shares traded at its peak, and then settled with an increase of 5.556% in daily price change to close at $0.190.
The bull market was seen after the company secured first juice supply contract to China on Wednesday. In an ASX announcement dated 28 November 2018, The Food Revolution Group announced that it has executed a distribution agreement with Shanghai-based company JJ Global Fine Foods that will supply FOD’s juice products to mainland China.
This distribution agreement includes the supply of three juice products that are orange juice with pulp, orange juice pulp-free, and apple juice. China Inspection and Quarantine (CIQ) has already given its approval for the supply of orange juice products across China. But for the highly-demanded apple juices, CIQ’s approval still remains pending and is expected to be received within 10 days.
It has been reported that the fruit farm range of apple and orange juice products of FOD will be distributed by JJ Global to high-end customers including the leading hotel chains of China like Marriott Group, Hyatt, Accor and Chinese supermarket giants. With FOD products in these high-end retail outlets in China, the brand presence and status of FOD’s all-natural Australian Fruit Farm brand are expected to be elevated throughout the country.
Following this distribution agreement in China, FOD and JJ Global expects around 50% growth in volumes on a year-on-year basis. FOD is positioned as the only Australian company that has developed a propriety cold fill technology to increase the shelf life of ambient fresh juice to nine months. Moreover, JJ Global’s parent company Conga recently acquired Metcash China, a wholesale distribution and marketing company.
The management of The Food Revolution Group Limited advised that the first orders are expected to be shipped as soon as the CIQ gives its approval to apple juices supply in China. The latest agreement comes in line with FOD’s recent MOU inked with China Petroleum & Chemical Corporation (Sinopec) under which Sinopec will sell FOD’s canola oil products across China.
After recording a new 52-week high today, FOD last traded at a Price to Earnings ratio of 29.510 x with market capitalization of $89.83 million. In the past six months, FOD’s stock price has jumped more than 2 fold; and over the past one year, FOD daily price change has been as giant as +361.54%.
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