Jatenergy’s Green Forest inks strategic distro deal

By Zoe Gross. Published at Sep 7, 2018, in Small Caps

Green Forest — 50% owned subsidiary of Jatenergy (ASX:JAT) — has clinched a distribution deal to supply China National Pharmaceutical Group Corporation (Sinopharm) with its Australian product range.

Sinopharm is of the world’s biggest pharmaceutical companies, with over 5,000 stores across China. It ranks 194th in Fortune’s 2018 Global 500 and is the sixth largest pharma company on that list, with annual revenue of USD $51.8 billion in 2017.

Sinopharm is also the largest Chinese medical and healthcare group directly managed by the state-owned Assets Supervision and Administration Commission of the State Council (SASAC).

Green Forest, meanwhile, is a Sydney-based wholesaler, distributor and exporter, which sells to more than 50 shops and pharmacies in Hong Kong, and over 200 gift shops, duty free stores and daigou (‘personal shopper’) warehouses in Australia, as well as Chinese cross-border platforms like Taobao and WeChat.

Green Forest’s range includes vitamins, cosmetics, dairy products and a range of other health-related consumer goods.

Sinopharm is establishing a new online-to-offline (O2O) sales channel for its 5,000 plus retail stores across China, including the GuoDa Pharmacies, which are operated by Sinopharm Holding GuoDa Drugstore Co., Lt — a national chain operating more than 3,800 retail pharmacies in over 70 Chinese cities.

Green Forest will supply Australian consumer goods to Sinopharm for sale through the O2O sales channel. Chinese consumers will be able to receive Green Forest products by home delivery from a cross-border bonded warehouse or direct from Australia.

O2O shopping is increasingly popular in China. Consumers can familiarise themselves with products in their local retail store which aren’t available through domestic distribution channels — they can then scan the product’s QR code to make the purchase and order home delivery.

“O2O is a large and growing part of China’s retail landscape and we are delighted to be part of Sinopharm’s national O2O rollout,” JAT executive director, Wilton Yao, said. “This is a great opportunity for JAT and for the brands we represent.”

However, it is an early stage of this company’s development and if considering this stock for your portfolio you should take all public information into account and seek professional financial advice.

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