The Novonix Ltd (ASX: NVX) share price continued its disappointing run on Wednesday.

The battery technology company’s shares were down almost 5% to a 52-week low of $1.77 before closing the day at $1.78.

This latest decline means the Novonix share price is now down a whopping 83% since the start of the year.

What’s going on with the Novonix share price?

The Novonix share price has come under pressure this year after loss-making companies fell out of favour with investors.

And boy is Novonix making a loss! Last month the company released its full year results and revealed a net loss of $71.4 million. This was 295% greater than the $18.1 million loss it recorded in FY 2021 and left Novonix with a cash balance of $207.1 million.

While that is a sizeable balance, management doesn’t expect it to be enough to reach profitability. This may have spooked investors. It explained:

The consolidated entity is continuing to execute on its expansion plans of reaching production capacity of 40,000 tonnes per year by 2025 and in order to fund these expansionary activities, which will primarily involve significant capital expenditure, additional funding beyond the existing cash balance at 30 June 2022 will be required.

What else?

Also weighing on the Novonix share price has been consistent price target downgrades by analysts at Morgans.

At the start of the year, the broker had a hold rating and $7.32 price target on its shares.

Since then, Morgans has been hacking away at its valuation. So much so, at the start of the month, the broker cut its price target down to $2.11. That’s a 71% haircut in less than 12 months!

Morgans has been disappointed with the commissioning of the Riverside anode facility and notes that there is still a lot of uncertainty with its anode business.

The post Novonix share price sinks to new 52-week low on Wednesday 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 Scott Phillips.

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The Bubs Australia Ltd (ASX: BUB) share price finished the session on Wednesday up 4.04% to 52 cents.

It far outperformed the S&P/ASX All Ordinaries Index (ASX: XAO) today, which closed down 0.55%.

The bump follows news that Bubs has entered into a new joint venture with a Chinese manufacturer.

The deal will see the local manufacture of a new ultra-premium range of goat infant formula products exclusively for Chinese infants.

As we reported earlier, Bubs requested that its shares be placed in a trading halt before the market open on Wednesday.

The company then released a statement outlining arrangements for the joint venture.

What’s the deal?

In its statement, Bubs said it had entered into a binding master term sheet and trademark licence agreement with Heilongjiang Ubeite Dairy Group Co., Ltd (HUG) and related parties.

Under the deal, HUG will manufacture and distribute a new ultra-premium range of Bubs China label goat infant formula products.

HUG applied to renew its existing registration with China’s State Administration for Market Regulation (SAMR) today.

The renewal application aligns with China’s new national standards for China label infant formula products. The standards were updated in March 2021 and become effective in February 2023.

If approved, the registration will be used exclusively for the manufacture of Bubs products. The new ultra-premium range would likely be launched in 2H FY23.

What did the company say?

Bubs Founder and CEO, Kristy Carr said:

We are pleased to announce this important milestone for the Company to renew an existing registered SAMR brand slot for Bubs China label Goat infant formula products in partnership with a reputable Chinese infant formula manufacturer.

First time access to 80% of China’s $40 billion market

Bubs said if SAMR approved the registration, the company would get access to the remaining 80% of China’s A$40 billion infant formula market for the first time.

Carr said:

Bubs China label ultra-premium [products] … supports the most significant demand and market trend in China, whereby both the ultra-premium segment and the goat milk segment are experiencing rapid growth despite the total category volume decreasing due to a reduction in birth rates.

In FY22, Bubs English label infant formula sales to China grew 179%, delivering over $42 million in gross revenue.

Subject to SAMR approval, this new registration would enable Bubs China label infant formula products to be marketed and sold in the remaining 80% of China’s General Trade …

Bubs share price snapshot

Bubs shares are up 10.6% in the year to date and up 48.6% over the past 12 months.

The post Bubs share price smashes ASX All Ords following China deal appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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 recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price closed 2% lower today despite a lift in retail trade figures for August.

Shares in the conglomerate that includes such retail names as Bunnings, K-Mart, and Officeworks finished the session at $43.15 apiece.

The S&P/ASX 200 (ASX: XJO) closed 0.53% lower while the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) was today’s third worst performing sector, losing 1.05%.

This is despite the Australian Bureau of Statistics (ABS) reporting a 0.6% increase in seasonally-adjusted retail trade figures today.

Let’s cover the highlights from the report.

What did the report say?

Overall, in-store and online retail sales lifted 0.6% month on month and 19.2% compared to August last year.

However, the ABS attributed most of the rise in retail spending to food-related industries. The Bureau’s head of retail statistics Ben Dorber said:

This month’s rise was driven by the combined increase in food related industries, with cafes, restaurants and takeaway food services up 1.3 per cent and food retailing up 1.1 per cent. While households continue to spend, non-food industry results were mixed and only contributed a small amount to the total rise in retail turnover.

In further bad news for Wesfarmers’ K-Mart and Target businesses, monthly turnover for clothing, footwear, and personal accessory retailing dropped 2.3%.

But on a positive note for its buoyant Bunnings brand, household goods retailing increased by 2.6%.

Some analysts are tipping today’s retail figures will spur the Reserve Bank of Australia to lift interest rates another 0.5% next month in its ongoing bid to curb inflation.

More bad news on the horizon

Certainly, consumer spending is widely anticipated to slow which could put further pressure on Wesfarmers shares, as reported by The Australian

A note by Commonwealth Bank of Australia (ASX: CBA) analysts said rate hikes and the end of fuel excise cuts will further contribute to the slowdown in consumer spending.

Analysts said:

We therefore think that retail spending will ease as the full impact of the RBAs rapid rate hikes of 225 basis points eventually feeds through to household balance sheets and the federal government’s fuel excise cut ends today, adding further pressure to consumer budgets.

Moody’s Analytics associate economist Gabriel Tay also believes rising interest rates could put a damper on sales despite the growth seen in a number of retail segments. He said:

We are only cautiously optimistic about retail sales growth till the end of 2022, as the Reserve Bank of Australia is pursuing the most aggressive monetary tightening cycle in its history to combat inflation.

Wesfarmers share price snapshot

The Wesfarmers share price is down 27% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 13% over the same period.

The company’s market capitalisation is around $49 billion.

The post Why did the Wesfarmers share price get walloped on Wednesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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 positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The FBR Ltd (ASX: FBR) share price bounced 10% on Wednesday after the company came out of a self-requested trading pause to respond to speculation of a potential capital raising or imminent takeover.

According to an article published on afr.com late last night, the bricklaying robotics company has recruited investment and advisory group Jarden Australia to set up meetings with fund managers.

According to the article, the purpose of the meetings is “to talk through the milestones FBR wants to hit over the next 12 months — binding orders for its robots, US and Europe expansion, and new hardware and software”.

The story speculated that this “informal roadshow” might imply that FBR is looking to boost its balance sheet with a capital raising.

Or perhaps Jarden is “angling for a defence mandate” in light of Australia’s biggest brickmaker, Brickworks Limited (ASX: BKW) buying up almost 12% of FBR shares in recent times. Maybe Brickworks is thinking about a takeover bid?

The ASX announced a temporary pause in trading for FBR shares one minute before the market open.

How did FBR and its share price respond?

FBR issued a statement at noon, saying:

The Company is currently planning to undertake a Non-Deal Roadshow following the release of its audited FY22 results.

As a developing company, FBR is periodically engaged in discussions with various parties in relation to strategic and capital raising opportunities however FBR can confirm there is no formal capital raising process currently under way and it has not formally engaged with financial advisers in relation to this.

The ASX share resumed trading shortly after its statement, with the share price leaping 10% to 4.4 cents. It then retreated to close at 4.1 cents, up 2.5% on Tuesday’s closing price.

Why is Brickworks interested in FBR?

As my Foolish colleague Tristan reported recently, FBR is designing, developing, building and operating an automated and stabilised bricklaying robot called Hadrian X.

According to FBR, Hadrian X “builds structural walls faster, safer, more accurately and with less wastage than traditional manual methods”.

So, you can understand why Brickworks is interested in the robot. It could potentially substantially lower costs for a company as large as them. And that would certainly come in handy right about now with global supply constraints causing major dramas and delays in construction.

At the time of Tristan’s report, the speculation was that Brickworks may aim to increase its shareholding to 20% and then attempt a takeover.

On 30 August, Brickworks paid about $6.5 million for more FBR shares, increasing its holding from 7.16% to 11.94%. On 11 August, Brickworks raised its holding from 5.05% to 7.16%.

Brickworks first became a substantial holder (above 5%) back in July when it did a deal with FBR for a $1.93 million share placement.

The placement followed FBR’s successful $4 million capital raising in June.

The post Guess which ASX share leapt 10% today amid renewed takeover rumours appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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