Why are Bubs Australia (ASX:BUB) shares put on trading halt?

September 28, 2022 10:58 AM AEST | By Sonal Goyal

Why are Bubs Australia (ASX:BUB) shares put on trading halt? — Image source: © Pretorius | Megapixl.com

Why Bubs requested a trading halt?

According to ASX announcement, Bubs intends to make an announcement regarding a new joint venture arrangement for the manufacturing and distribution of the company’s branded products in China.

Australia, USA and China are key markets for Bubs.

Everything you need to know about Bubs’ China market

During the fourth quarter of financial year 2022 (4QFY22), China market contributed 64% in the quarterly sales and corporate daigou sales increased by 1201% on prior corresponding period (pcp).

In the financial year 2022, the company reported 166% revenue growth in the Chinese market. Corporate daigou’s gross revenue increased by five-fold on a year-on-year basis.

Through an ASX announcement, Bubs shared that the five-fold increase in gross revenue over the previous year was driven by the launch of Supreme A2 beta-casein protein infant formula via mother and baby stores and E-Commerce. Also, equity linked strategic partnerships with corporate daigou partners drove the revenue higher in the Chinese market.

Bubs said:

What is Bubs' expectation from China?

While sharing the quarterly (4QFY22) results, Dennis Lin, the executive chair, said that the company expects that growth in the USA and China would largely contribute to revenue and margin contribution in FY23.

The share price performance of Bubs

Bubs shares last traded at AU$0.50 apiece. The share price has decreased 1.98% in the last five trading sessions. In one month, the shares have registered a fall of 18.85%. On a year-to-date basis, the share price has surged 5.32%.

In the past 12 months, the shares have marked a rise of 41.43% and recorded a rise of 10% in the last six months alone.

The company holds a market cap of AU$369.14 million currently.

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