Bubs Australia Ltd (BUB)
One of the largest goat milk, as well as fastest infant milk growing companies.
They have some competition with A2 milk, but in the end of the day… Every single person needs nutrition! So, there’s definitely opportunity for more than one winner.
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Backdrop and Fundamentals
They have a lot of opportunity to scale into China, thanks to some of their partnerships with Chinese companies that I have no idea how to spell.
All I know, is that these main e-commerce companies give them access to over 50 million Chinese consumers as time goes on.
New distribution partnerships Woolies, JD.com and Alibaba and so many more, especially in China.
Over the next few years geographical regulations and laws may be a risk, but they have shown over the past years that they are agile and that they can adapt.
They have a strong infant formula business as revenue in this category grew 58% year-on-year for them.
Bubs are not profitable yet (as most high growth stocks lately), but the revenues are increasing continuously. So, the company is heading towards profitability. For now, they are investing heavily into their expansion plans.
The Vietnam potential is also a great opportunity, as the economy is growing very fast in Vietnam and they are gaining market share!
They are gaining market share within Vietnam.
The share price is currently trading at A$0.74, so it is still “small”.
Bubs has 3 factors that make me very optimistic about the company for the long term:
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Informed decisions
The future is never completely clear.
With a high growth company like this, it is essential to stay in touch with what the company does over the next few quarters and years, so far I really like what they are doing and I am optimistic on Bubs Organic as an investment opportunity!
New to investing
and want to know more about Australian stock additions?
Read: Got (a2) Milk? An analysis on ASX-listed a2 Milk Co.
Higgo van Biljon
Easy user, Founder & CEO FinMeUp
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