Bubs Australia shares have surged after the infant formula provider agreed to supply China-based New Times Asia with products to be sold on up to 20 e-commerce platforms in China.
New Times Asia specialises in providing e-commerce platforms with well-known brands, including numerous imported infant formula and milk powder brands.
New Times Asia has committed to buying $17 million worth of Bubs and CapriLac products from Bubs Australia in the 2019 financial year – more than doubling Bubs’ total sales revenue.
Bubs Australia says the Chinese company is expected to lift its orders to $24 million in fiscal 2020 and to $37 million in fiscal 2021.
“The agreement with New Times Asia is a major step forward in our China expansion strategy, and shows the investment we have been making and continue to make in building our China presence is bearing fruit,” Bubs Australia founder and managing director Kristy Carr said in a statement on Monday.
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New Times Asia’s responsibilities include sales, operations, logistics, customer service, and promotion and marketing.
Its chief executive Michael Deng said Bubs and CapriLac were trusted Australian brands, and demand for premium specialised formula, goat milk and organic products was growing rapidly in China.
Bubs shares were 6.5 cents, or 8.5 per cent, higher at 83 cents at 1245 AEST.