JAT inks distro deal for over $7.5M single product revenue

|

Published 26-JUN-2018 11:58 A.M.

|

3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

JAT Energy (ASX:JAT), a China-Australia cross-border specialist in Fast Moving Consumer Goods (FMCG) exports, this morning revealed it has penned a distribution agreement with Cyclone E-Commerce Co., Ltd.

This deal will see Cyclone purchase over $7.5 million in product from JAT over the next 12 months — considerable revenue for a single product.

Cyclone is a distributor based in Hangzhou City, Zhejiang and is part of the London-based Gingko International Limited group. Cyclone uses proprietary cross-border e-commerce platforms and bonded warehouses to deliver global products to Chinese consumers.

Cyclone supplies global maternity and baby brands, health products, snacks, and skincare products through the Hipac, Momtime and other maternal and baby platforms, as well as to O2O experience stores and micromarts. O2O refers to the business strategy of “online-to-offline”, which draws potential customers from online channels to make purchases in physical stores.

Under this distribution agreement, Cyclone agrees to purchase 300,000 tins of NEURIO — Lactoferrin Milk Powder from JAT over a 12-month period at the best market price. Cyclone has exclusive rights to sell the product on the Hipac and Momtime platforms.

The agreement runs for 12 months, which can then be extended. Cyclone must make full payment for all orders prior to shipping by JAT.

As always, it should be noted that JAT is an early stage play and anything can happen, so seek professional financial advice if considering this stock for your portfolio.

NEURIO – Lactoferrin Milk Powder is a product supplied by Sunnya Pty Limited. As previously announced to market, JAT is acquiring 51 per cent of Sunnya, subject to shareholder approval in August.

Sunnya has agreed to supply to JAT all of the Neurio product required for the Cyclone agreement over the next year, regardless of whether the acquisition proceeds.

Executive chairman, Tony Crimmins, said: “This transaction brings in more than $7.5 million in revenue over the 12 months. That’s quite pleasing for a single product with a single customer.”

“Just as important, it’s confirmation of our strategy of combining Sunnya’s products with JAT’s distribution capacity. NEURIO – Lactoferrin Milk Powder is an attractive product in China and the orders are starting to reflect that,” added Crimmins.

This announcement comes on the heels of another piece of salient news for JAT — its announcement last Friday of another distribution deal with Australian Huibao International Group Limited. Huibao is an Australian-owned company which operates a ‘Community O2O’ business in five regions of China. Huibao has placed its first order with JAT for 960 tins of NEURIO – Lactoferrin Milk Powder. JAT will purchase the products from Sunnya for resale.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X