Day: 23 March 2022

The Imugene Ltd (ASX: IMU) share price is climbing today on the back of a clinical update from the biotech company.

Imugene shares are currently trading at 28 cents, a 7.69% gain. In contrast, the  S&P/ASX 200 Index (ASX: XJO) is up 0.53% at the time of writing.

Let’s take a look at what Imugene announced today.

Clinical trial update

Imugene has received Western Institutional Review Board approval to kickstart a phase one clinical trial of a new cancer treatment.

The company will look into the use of its oncolytic virotherapy candidate, known as Vaxinia, on multiple solid tumours.

The world-renowned City of Hope cancer treatment centre near Los Angeles is the first hospital in the US to receive ethics approval. Further clinical sites will open in the US in 2022. Patient recruitment will start immediately.

Commenting on the start of the trial, CEO and managing director Leslie Chong said:

Accomplishing this goal speaks to the perseverance and dedication of Imugene’s clinical and research team as we continue to build on our clinical and commercial potential.

Following the outstanding work of Professor Yuman Fong and the City of Hope team, in addition to the positive pre-clinical results, we’re incredibly eager to unlock the potential of VAXINIA and the oncolytic virotherapy platform more broadly.

The trial will be conducted via the Food and Drug Administration investigational new drug process. Imugene received US Food and Drug Administration (FDA) approval for the trial in December.

Share price snapshot

The Imugene share price has skyrocketed 137% in the past year. However, it has dropped around 29% year to date.

In contrast, the broader ASX 200 Index has returned about 9% in the past 52 weeks.

During the past month, Imugene shares have gained nearly 12%, up more than 16% in the past week.

Imugene has a market capitalisation of about $1.6 billion based on its current share price.

The post Here’s why the Imugene (ASX:IMU) share price is having such a stellar day appeared first on The Motley Fool Australia.

More reading

• Do ASX biotech shares offer ‘good buying’ after the sell-off? Experts weigh in
• Imugene (ASX:IMU) share price lifts on major collaboration announcement
• Here are the top 10 ASX shares today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in KMD Brands Ltd (ASX: KMD) have punched up into the green during early trade on Wednesday following the release of the company’s half yearly reports for the period ending January 31 2022.

At the time of writing, the company – formerly known as Kathmandu – has its share price fetching for $1.24 after releasing its earnings today.

KMD Brands share price spikes amid flat earnings growth

Key takeouts from the company’s earnings results today include:

• Sales of $407.3 million compared to sales in 1H FY21 of $410.7 million
• Gross margin of 57.7%, a slight decline from 59% this time last year
• Underlying EBITDA of $10.2 million, down from 1H FY21 result of $48.2 million – excluding the impact of IFRS 16 accounting changes
• Statutory net profit after tax (NPAT) loss of $5.5 million
• Strong balance sheet with $48.6 million net debt and comfortably within all covenants; significant funding headroom of circa. $250 million
• Interim dividend increased by 50% to fully franked 3.0 cents per share
• Rebranding to KMD brands “earlier this month” to reflect purpose and “commitment to operational excellence and leadership in ESG.”

What else happened this period for KMD Brands?

Sales of $407 million came in slightly behind H1 FY21 and were heavily impacted by COVID-19 lockdowns. Thankfully as restrictions lifted, revenue came in ahead of Q1 FY22.

The cost of these revenues was higher, however, and gross margins saw a 130 basis points headwind at 57.7%. KMD says this was due to “elevated international freight costs, and increased clearance mix for the Kathmandu brand.”

With respect to segments, Rip Curl delivered sales growth of almost 3% over the period, underscored by growth in online and wholesale sales. Most of the upside was recognised in Europe and Hawaii, KMD notes.

Whereas in North America, volumes were impacted by “short-term wetsuit shortages and port congestion,” the company says.

Meanwhile, the Oboz brand was hit by store closured in Vietnam, also due to COVID-19. It’s business again as usual for the segment but KMD notes the closures hit sales as orders couldn’t be filled.

“However,” the company says, “the demand for the Oboz brand and products has never been stronger, with forward orders into FY23 very strong and supporting our medium-term growth targets.”

Management commentary

Speaking on the announcement, Group CEO & Managing Director, Michael Daly said:

We continued to deliver on our strategic objectives, positioning KMD Brands for growth as travel rebounds globally and COVID-related impacts on supply abate. We maintained a strong focus on building our global brands, sponsoring the first ever World Surf League finals, with the men’s event won by a Rip Curl surfer. We opened twelve new owned / licensed retail stores globally, and online sales increased to 17.4% of direct-to-consumer sales, rewarding initiatives to elevate digital capabilities. Substantial progress was also achieved on our ESG strategy.

Our rebranding to KMD Brands earlier this month reflects our purpose to inspire people to explore and love the outdoors, with a vision of being the leading family of global outdoor brands – designed for purpose, driven by innovation, best for people and planet. It is with this ethos in mind that we look to develop our portfolio of global brands, underpinned by investments that deliver a world-class unified commerce experience, and our commitment to operational excellence and leadership in ESG.

What’s next for KMD ?

Commenting on the Group’s outlook, Daly also said there were challenges going forward – particularly related to COVID – but that the future looks bright under the new branding.

While we continue to navigate impacts from COVID on global supply chains, forward demand for our Rip Curl and Oboz products remains at record levels, and Kathmandu enters the traditionally strong winter season well prepared. We will continue to invest in building our global brands in the second half, with the launch of Kathmandu online sites in Europe and Canada and the merging of Canada and UK fulfilment centres for all brands.

I am excited by the opportunities we have to build our portfolio of brands under our new parent company KMD Brands. The parent company is providing vision and strategic guidance to enable group synergies, including sharing expertise in technology, materials and leveraging operational excellence in sourcing, supply chain and systems, to deliver the best customer experience across our brands.

KMD share price snapshot

In the last 12 months, the KMD share price has faltered and is now less than 1% in the red. It is down 13% this year to date.

During the past month of trading, shares have collapsed another 2% and are trailing the major indexes in 2022.

The post KMD Brands (ASX:KMD) shares spike on first results after rebrand. Has it worked? appeared first on The Motley Fool Australia.

More reading

• Carnarvon (ASX:CVN) share price explodes 36% higher on ‘material’ oil find
• The Plenti (ASX:PLT) share price is surging 11% today. Here’s why
• Why Alibaba stock was soaring today
• Why is the Myer (ASX:MYR) share price slipping today?
• Here’s why the Anteotech (ASX:ADO) share price is leaping 6% today

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Carnarvon Energy Ltd (ASX: CVN) share price has returned from its trading halt with a bang.

In morning trade, the energy producer’s shares were up as much as 36% to a 52-week high of 43.5 cents.

The Carnarvon Energy share price has since pulled back but remains up 16% to 37 cents at the time of writing.

Why is the Carnarvon Energy share price shooting higher?

Investors have been bidding the Carnarvon Energy share price higher today following the release of drilling results from the Pavo-1 well.

The Pavo-1 well is covered by the WA-438-P exploration permit, which Carnarvon Energy has a 30% interest in, with Santos Ltd (ASX: STO) owning the balance.

According to the release, drilling activities confirm that the Pavo-1 well has made a material oil discovery. Light oil has been recovered from excellent reservoirs and the highly porous and permeable sands contain a net pay thickness of 46 metres from within a gross hydrocarbon package of 60 metres.

These results are expected to add significant value to the Dorado development plan.

Carnarvon’s Managing Director and CEO, Adrian Cook, commented: “Today we announce another important oil discovery in the Bedout Basin, with high quality oil having now been recovered to surface from excellent quality reservoirs. This discovery is material because Pavo lies only 46 kilometres from the proposed Dorado production facilities and is expected to be an ideal resource to tie back to Dorado.”

What’s next?

Mr Cook notes that it will soon be time to decide on the future of the Dorado operation.

He said: “Subject to the joint venture making a final investment decision (FID) this year, the Dorado production infrastructure is planned to be in-place by the end of 2025 and will have the capacity to tie-in other fields like Pavo with no material increase in operational costs.”

“Pavo proves the extension of a working petroleum system some 46 kilometres east of Dorado. The well demonstrates that quality reservoir and trapping mechanisms are effective in this area, which hosts a suite of other exploration targets. These will now warrant further assessment for drilling.”

“We have a number of additional drilling activities to undertake in the Pavo-1 well before moving the drilling rig to the Apus-1 well location. Overall, we are extremely pleased with the Pavo-1 result and are looking forward to it adding significant value within what is now expected to be an expanded Dorado production hub,” he concluded.

The post Carnarvon (ASX:CVN) share price explodes 36% higher on ‘material’ oil find appeared first on The Motley Fool Australia.

More reading

• Here’s why the Carnarvon (ASX:CVN) share price is halted today
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Plenti Group Ltd (ASX: PLT) share price is surging higher today.

Plenti closed yesterday at 91 cents and leapt 16.9% higher to $1.06 at open.

Shares are currently trading for $1.00, up 10.5%, in morning trade.

So why are ASX investors bidding up the Plenti share price today?

Profit forecast upgraded

Investor interest looks to have been piqued this morning after the ASX fintech lender upgraded its profit forecast.

The Plenti share price is charging higher on the report that the company expects to be Cash NPAT profitable for the full year to 31 March 2022. That’s the date when Plenti marks its full 2022 financial year (FY22).

The company’s previous Cash NPAT forecast for FY22 had been to reach at least $1.0 million in the 6-month period ending 31 March (2H22). It’s now boosted that forecast, with expectations to deliver at least $2.2 million in 2H22.

The fintech lender also said it had reached its $1.25 billion loan book growth target for FY22, with the current loan portfolio standing at roughly $1.28 billion.

Commenting on the upgraded financial numbers, Plenti CEO Daniel Foggo said:

We are pleased to be upgrading the forecast for our key profitability metric, as we believe profitability is the critical yardstick against which any business should be measured. Our proprietary technology platform is delivering operating leverage as we scale while continuing to provide exceptional customer experiences, helping us take market share.

Foggo’s bullish outlook for the year ahead could also be helping boost the Plenti share price today.

“Having moved to a positive Cash NPAT position, combined with the attractive corporate debt facility announced last week, Plenti is well-placed to continue its growth into the next financial year,” he said.

Plenti share price snapshot

With today’s intraday gains factored in, the Plenti share price has erased its 1-year losses and is trading right where it was 12 months ago. For some context, the All Ordinaries Index (ASX: XAO) has gained 9.6% over that time.

The post The Plenti (ASX:PLT) share price is surging 11% today. Here’s why appeared first on The Motley Fool Australia.

More reading

• Why Alibaba stock was soaring today
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• Here’s why the Anteotech (ASX:ADO) share price is leaping 6% today
• Why this expert says the Ethereum price will triple in 2022
• Santos (ASX:STO) share price lower despite ‘significant oil discovery’

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened?

Shares of Alibaba (NYSE: BABA) were moving higher on Tuesday after the Chinese tech giant announced an increase in its share buyback program, signalling that management sees the stock as undervalued.

As of 12:22pm ET, the stock was up 10.7%.

So what?

On Tuesday morning, management revealed that the board had voted to boost the size of its share repurchase authorization from $15 billion to $25 billion, equivalent to about 8% of the stock’s market cap after the morning’s gains. The company did not explain the move, but called it a sign of confidence about its continued growth.

Alibaba shares surged last week after China’s Vice Premier Liu He said that the government would act to support stability in the economy and financial markets, and that its ongoing crackdown on tech companies should be over soon. That announcement followed more than a year of tightening regulations on that country’s tech companies. Alibaba was particularly targeted. The government in Beijing blocked the planned spinoff and IPO of Ant Group, its financial arm; levied a $2.8 billion anti-monopoly fine against it; and forced it to divest itself of several of its media assets. Those actions and similar ones involving other companies have rattled investor confidence in China. Alibaba stock fell by as much as 75%, and its peers experienced sharp declines as well.

Now what?

Following last week’s announcement, Chinese officials have continued to send conciliatory signals to the market. Beijing now seems to believe its prior policies have gone too far, given that China’s GDP growth slowed to just 4% in the fourth quarter, and Chinese stocks have lost more than $2 trillion in market cap.

Alibaba’s share buyback announcement won’t make a huge difference, but it’s the latest sign that the tech giant is on the rebound after a forgettable year for investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Alibaba stock was soaring today appeared first on The Motley Fool Australia.

More reading

• Why Chinese stocks collapsed again today
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Jeremy Bowman owns Alibaba Group Holding Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Myer Holdings Ltd (ASX: MYR) share price is heading south during late Wednesday morning trade.

At the time of writing, the Australian department store group’s shares are down 0.98% to 50.5 cents.

Why are Myer shares falling today? 

Following the company’s half year results released on 10 March, investors are eyeing Myer shares as they go ex-dividend today.

Yesterday, Myer shares rose by 0.99% as investors contested to lock in the company’s upcoming dividend.

The ex-dividend date, is when investors must have purchased shares to be eligible for the dividend. For example, if the investor did not buy Myer shares before this date, the dividend will go to the seller.

What does this mean for Myer shareholders?

For those eligible for Myer’s interim dividend, shareholders will receive a payment of 1.5 cents per share on 12 May. The dividend is fully-franked, which means investors can expect to receive tax credits from this.

It is worth noting that this is the first dividend that has been declared since the final FY17 dividend. The board reinstated the dividend based on the company’s strong financial performance achieved in H1 FY22.

Also, in case you were wondering, there is no dividend reinvestment plan (DRP) being offered at this stage.

Myer share price summary

Since the beginning of 2022, Myer shares have gained 11% on the back of positive investor sentiment. On the other hand, the All Ordinaries (ASX: XAO) is down around 1.6% over the same timeframe.

Myer shares reached a 52-week high of 63.5 cents in September, before travelling on a downhill trend until earlier this month.

Based on today’s price, Myer has a price-to-earnings (P/E) ratio of 11.63 and commands a market capitalisation of $410.64 million.

The post Why is the Myer (ASX:MYR) share price slipping today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AnteoTech Ltd (ASX: ADO) share price is in the green today following some news from the company.

AnteoTech shares are currently swapping hands at 10 cents, a 3.09% gain, after hitting 10.5 cents in early trading. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.49% at the time of writing.

So what did Anteotech announce today?

CEO resigns

AnteoTech CEO Derek Thomson has resigned from the company. AnteoTech, based in Brisbane, developed a COVID-19 rapid antigen test (RAT) and EuGeni Reader diagnostic platform.

Thomson will serve out his six month notice period. During this time, Thomson will work with executive director Christopher Parker and the management team to continue advancing the commercial activities of the company.

Anteotech said the board is grateful for Thomson’s contribution since joining the team in July 2019 and has led the company through “a period of considerable growth and development”.

Commenting on the resignation, AnteoTech chair Dr Jack Hamilton said:

On behalf of the board, we wish Derek well in his future endeavours. Since he joined AnteoTech in mid 2019, the company has experienced considerable growth and its operations have diversified considerably, thanks to the work he and the senior leadership team have undertaken.

Speaking on the succession plans, Hamilton added:

The Board is committed to ensuring it secures a suitably experienced CEO candidate that can successfully drive commercialisation of our technology and capitalise on the progress made to date.

We will keep shareholders informed of progress here and with all material operational development.

Parker was recently re-appointed executive director of the company. He will take an active role supporting Thomson to ensure “critical streams” of the Life Sciences and Energy division remain on track. He previously served as CEO of the company between April 2018 and May 2019. The board has agreed to pay Parker up to $21,000 per month for this transition work.

AnteoTech is still awaiting Therapeutic Goods Administration approval for its COVID-19 rapid antigen test. The TGA has requested more data from the company to align with World Health Organisation and European Medical Device Coordination Group requirements.

Share price snapshot

The AnteoTech share price has dropped 59% in the past year. Further, it’s fallen around 67% year to date and is down 47% in the past month alone.

In contrast, the broader ASX 200 Index has returned about 9% over the past 52 weeks.

AnteoTech has a market capitalisation of around $199 million based on its current share price.

The post Here’s why the Anteotech (ASX:ADO) share price is leaping 6% today appeared first on The Motley Fool Australia.

More reading

• Why is the Myer (ASX:MYR) share price slipping today?
• Why this expert says the Ethereum price will triple in 2022
• Santos (ASX:STO) share price lower despite ‘significant oil discovery’
• Broker gives its verdict on the Bubs (ASX:BUB) share price
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ethereum (CRYPTO: ETH) price is up 2.9% over the past 24 hours, currently trading for US$2,998 (AU$4,022).

That puts the world’s number two token by market cap up 14.3% over the past week.

While it still has a goodly way to go before overtaking its 16 November all-time high of US$4,892, that may happen sooner than you think.

Indeed, according to Kain Warwick, founder of derivatives trading system Synthetix, the Ethereum price not only will surpass its previous high-water mark in 2022, it will go far higher.

The case for the Ethereum price rocketing higher

Warwick was speaking at the Blockchain Australia event this week.

And as the Australian Financial Review reported, he forecasts the Ethereum price will more than triple in 2022, reaching US$10,000.

Warwick’s bullish forecast is largely based on the major upgrade underway with the Ethereum blockchain. This will see the crypto shift from proof-of-work (PoW) to proof-of-stake (PoS).

Once complete, the upgrade will eliminate the use of so-called crypto miners in the Ethereum blockchain. Miners are at the root of PoW consensus protocols, used by the likes of Bitcoin (CRYPTO: BTC), and the energy and financial costs of running the PoW protocols have been soaring.

Moving to PoS is forecast to make Ethereum transactions faster, cheaper, and far more energy efficient.

Gas fees set to plummet

The transaction fees collected by Ethereum miners, called gas fees, reached record highs last year. While fees have since fallen considerably, they’re still high enough to discourage widespread mainstream adoption.

But that’s expected to change with the scaled-up blockchain network operating under a PoS protocol. Which could put a rocket under the Ethereum price.

According to Warwick (quoted in the AFR):

New people wanting to swap dollars for Ethereum and build on top were finding the fees completely prohibitive. But there has been so much work done on scaling the Ethereum blockchain that there is a really credible case for new entrants where it is viable for them to transact.

The post Why this expert says the Ethereum price will triple in 2022 appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Santos Ltd (ASX: STO) share price is trading lower on Wednesday.

In morning trade, the energy producer’s shares are down 0.5% to $7.76.

Why is the Santos share price falling?

The Santos share price is falling today after oil price weakness offset the release of a positive announcement relating to its Pavo-1 exploration well.

According to the release, drilling activities at the Pavo-1 exploration well have confirmed a significant oil discovery 46 kilometres east of the Dorado field in the Bedout Sub-basin, offshore Western Australia.

The release highlights that the well was drilled on the northern culmination of the greater Pavo structure and encountered a 60-metre gross hydrocarbon column in the primary Caley member reservoir target.

Management notes that the result at Pavo-1 significantly de-risks the hydrocarbon bearing potential of the separate southern culmination of the greater Pavo structure. The southern culmination has an additional best estimate P50 prospective resource of 40 mmbbl gross, of which Santos has a 70% interest. The remaining 30% interest belongs to Carnarvon Energy Ltd (ASX: CVN).

Management commentary

Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher, was pleased with the discovery and believes it could add material value to the Dorado project.

He commented: “The Pavo-1 success is expected to support a potential low-cost tie-back to the first phase of the proposed Dorado development, with Pavo north having an estimated breakeven cost of less than US$10 per barrel, and future gas production from the Bedout basin providing a source of supply into our existing domestic gas infrastructure in Western Australia.”

“With the global oil and gas markets seeing increased volatility, low-CO2 oil and gas resources at Dorado and Pavo add significantly to Australia’s national energy security. It is also very encouraging for the next exploration well in the current campaign, Apus-1, which offers another potential nearby low-cost tie-in opportunity to the Dorado development. The Pavo-1 well result also proves the petroleum system in the basin is effective over a greater area, de-risking a number of nearby low-cost opportunities,” Mr Gallagher added.

The post Santos (ASX:STO) share price lower despite ‘significant oil discovery’ appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bubs Australia Ltd (ASX: BUB) share price is pushing higher on Wednesday morning.

At the time of writing, the infant formula company’s shares are up 2.5% to 44 cents.

Why is the Bubs share price rising today?

The catalyst for the rise in the Bubs share price on Wednesday appears to have been a broker note out of Bell Potter this morning in response to yesterday’s announcement.

In case you missed it, Bubs’ announced that it would be going head to head with A2 Milk Company Ltd (ASX: A2M) with the launch of Bubs Supreme infant formula and toddler milk with natural A2 beta-casein protein. This A2 protein-based infant formula product will be launched into 500 Coles Group Ltd (ASX: COL) supermarkets from May.

And while the Bubs share price initially rose on the news, it ended the day flat. This may be due to investors taking a wait and see mentality with this announcement. After all, Bubs has hyped up countless product launches, such as its Vita Bubs vitamin range, in recent years, which have had little impact on revenue.

In addition, the company revealed its first purchase order of $32.9 million from daigou specialist Willis Trading for the new infant formula range.

What did the broker say?

According to the note, Bell Potter has retained its speculative buy rating and 70 cents price target.

Based on the current Bubs share price, this implies potential upside of 59%.

Bell Potter commented: “BUB announced the launch of an a2 protein IMF to sit alongside its existing goat and grass fed products. While the product will initially be ranged in ~500 Coles, it’s the initial $32.9m purchase order from Willis Trading (i.e. Alpha Group) for delivery over 4Q22-1Q23 that is the most material aspect of the announcement. In 1H22 BUB generated gross IMF sales of ~$20.4m ($18.5m NSR) and group gross sales of ~$38.4m, so an initial purchase order of this magnitude is material.”

“At a high level we continue to witness improving secular trade flows to China, which is a positive for the existing BUB business. However, it is the upside potential within the equity linked targets that has the scope to create the most material value for BUB. The incremental EBITDA delta on Daigou IMF sales is high, with a GM in excess of 30%, and while achieving sales targets comes with equity dilution, the potential uplift in profitability would likely outweigh this. The initial purchase order on a new SKU is a positive development on the previously announced partnership in our view,” it concludes.

The post Broker gives its verdict on the Bubs (ASX:BUB) share price appeared first on The Motley Fool Australia.

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• Bubs (ASX:BUB) share price higher on daigou deal
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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