China exporter Jatenergy feeds Shanghai Dragon a shipping container of oats
China exporter Jatenergy has received its first order from Chinese state-owned enterprise Shanghai Dragon Corporation — for a shipping container of Aussie oats.
The oats will get space in about 4000 stores in China.
“This order represents the tangible commencement of Chinese retail sales for JAT,” said JAT chairman Tony Crimmins.
Jatenergy was one of the best performing ASX stocks small caps early this year, winning ten-bagger status after it joined the infant formula export crew — propelling its shares from 2c as high as 29c.
The shares have since cooled — but were up 5 per cent at 9.5c in early Monday trade.
“A strong Chinese retail presence is the fourth pillar in our FMCG [fast moving consumer goods] strategy, setting us apart from other Australian trading companies selling to Chinese consumers.”
Meanwhile another high-flying milk exporter Bubs Australia (ASX:BUB) fell today after announcing a $40 million capital raising at 75c a share to professional investors. BUB shares were down 8 per cent to 82c.
Under JAT’s new deal, Shanghai Dragon will sell its Australian products and develop JAT’s Cobbitty Country brand in China.
Over the last month JAT has been working on widening its distribution channels.
It’s got a rent-free spot in a Chinese mall owned by one of its directors, and bought 51 per cent of Sunnya, a company that exports Australian milk powder and health products to China, for $3.9 million in cash and scrip.
The directors or Sunnya do not appear to have a pre-existing relationship with JAT.
The company says it has $1.5 million available to pay the initial $3 million cash component, and is seeking to raise $5.8 million from shareholders.
JAT has been contacted for comment.