China-focused retailer AuMake hasn’t needed to spend much of the $14 million it raised in January to snap up a retail chain that sells New Zealand products.

The former 10-bagger snapped up a bargain, striking a deal to hand over 1.2 million shares at 25c a piece — worth $300,000 — for five-store Sydney-based chain KiwiBuy. In addition, AuMake will pay up to $500,000 for inventory.

“Due to financial and personal circumstances, the owners of Kiwi Buy reached out to AuMake as their first port of call and after initial discussions, made the decision to sell their much-loved family business to AuMake,” said AuMake exec chairman Keong Chan.

The deal illustrated “increasing competitive pressures facing smaller operators in the daigou and Chinese tourist markets”, Mr Chan said.

“AuMake is ideally positioned to acquire businesses on attractive terms to consolidate the sector and to also significantly improve the financial performance of the businesses we acquire.”

AuMake targets shoppers (or “daigou”) who buy Australian healthcare, cosmetics or local food products on behalf of people in China.

Its shares climbed 12 per cent to 28c in early Monday trade before settling back to 26.5c just after 10.30am AEST.

AuMake International shares (ASX:AU8) over the past six months.
AuMake International shares (ASX:AU8) over the past six months.

AUMake says KiwiBuy — whcih has a database of 38,000 customers — banked $18 million in unaudited sales over the past year.

AuMake raising $14 million in january selling shares at 45c to accelerate its retail store rollout program. aiming for  “a minimum of 20 retail stores in key locations across Australia”.

AuMake was one of last year’s best ASX floats, gifting shareholders a stunning 10-fold return on its 8c offer price in little more than a few months.

The shares climbed as high as 83.8c in december — but have since lost two-thirds of their value.