The ASX’s newest milk smallcap Keytone Dairy has produced a massive upswing in revenue — and an even bigger widening in its half year loss.

The company’s (ASX:KTD) revenue lifted by 116 per cent to touch $1.4m, following “significant” sales growth thanks to investments the company has been able to make following the $15m July IPO.

But the company also plunged into the red with a 1,736 per cent slide to a $1.5m loss, from a $96,812 profit in the same period last year.

Keytone said the majority of the loss was from IPO cost and an accounting expense related to 8.5m in option grants to directors and management in the IPO.

Chief James Gong says the revenue growth is reflective of the “rapid expansion and investment” the company is undertaking with the $15m in IPO cash they raised.

The company is spending hard to expand its New Zealand manufacturing capacity as well as develop new in-house products.

“I am particularly pleased with the growth in sales during the period, given the logistical and capacity constraints of the existing facility,” he said.

“The new product launches of KeyDairy Goat Milk Powder and KeyDairy Anhydrous Milk Fat have been successful, as has been the expansion of our e-commerce distribution channels in our core market of China.”

Keytone has been contacted for comment.

Keytone stock was flat on Thursday at 46c.

Keytone shares since listing July 2018.

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