The Jatenergy Ltd (ASX: JAT) share price has been on the move again on Wednesday.
At the time of writing the infant formula company’s shares are up 14.5% to 27.5 cents.
Why are its shares rocketing higher?
This morning Jatenergy announced that it has entered into a distribution agreement with China’s Jiangsu Jbingo International Co. Ltd.
According to the announcement, the agreement will see Jbingo distribute all of the company’s products, including its 51%-owned Golden Koala range of milk powders.
The distribution will be through Jbingo distribution platforms in territories in China selected by the company for both online and offline sales.
Management has advised that Jbingo is a major product distributor in China with wide geographical coverage. It sells to leading Chinese B2B maternal and baby platforms such as Hipac, Seatent, Yuouhui, Qianfeng, Mainsweb and DDH, as well as some business-to-consumer platforms such as JD, VIP, Xiaohongshu and Taobao.
Importantly, the distribution agreement is not exclusive and Jatenergy is free to sell products through other distributors.
Should you invest?
However, others have tried and failed before and there’s no guarantee that any of these up and coming infant formula companies will be able to generate meaningful sales in a crowded market.
As I have mentioned previously, I think Bubs’ goats milk offering could have the best chance of succeeding due to differentiating from the competition. Whereas the others lack a unique selling point, in my opinion, that will allow them to stand out and take on a2 Milk and Bellamy’s successfully.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
- Why the EML Payments (ASX:EML) share price is in a trading halt – May 17, 2021 10:38am
- Carsales (ASX:CAR) share price down 7% after raising $428 million – May 17, 2021 10:14am
- Incitec Pivot (ASX:IPL) share price sinks 5% on half year update – May 17, 2021 10:08am