MENU

Why infant formula small cap Jatenergy Ltd (ASX:JAT) rocketed higher today

The Bellamy’s Australia Ltd (ASX: BAL) share price has been flying high on Tuesday after a series of declines following the release of a broker note out of Goldman Sachs last week.

But it isn’t the biggest mover in the infant formula industry today. That honour goes to energy-cum-infant formula company Jatenergy Ltd (ASX: JAT) which has seen its share price rocket 24% to 9.2 cents.

Why are Jatenergy’s shares rocketing higher?

Today’s gain appears to be related to news that the company has secured exhibition space at the 18th Shanghai International Children Baby and Maternity Products Industry Expo later this month.

According to the release, Jatnergy has an 18 square metre exhibition space that will showcase the portfolio of products the company has been developing since the switch from energy to fast moving consumer goods trading.

Chief among them will be its partly owned Golden Koala infant formula range which it will be offering product samples of to visitors in the hope of attracting suppliers.

Management sees a lot of value in the trade fair. Stating that: “These trade fairs offer excellent brand exposure. More importantly, visitors are trade professionals looking for new products and new suppliers and planning to place orders.”

Should you invest?

Jatenergy has signed a number of promising agreements recently with the likes of Cyclone E-Commerce and JD.com.

While this is undoubtedly a positive and the trade fair could prove to be a good strategy, I still think it is far too soon to invest in its shares.

After all, there’s no guarantee that these distribution agreements or the trade fair will ultimately lead to a notable lift in sales any time soon.

Because of this I would suggest that investors continue to stay away from Jatenergy and stick to the companies that are already successfully selling infant formula products into the lucrative China market such as Bellamy’s and A2 Milk Company Ltd (ASX: A2M).

Here's an ASX small cap up 285% and showing no sign of stopping...

One Australian company has developed a state of the art device that's revolutionizing hospitals all over the world. Even better, this device is so profitable that the company rakes in 90% margins. That's a lot of cash. So no wonder the stock's up 285% since 2008 – with no signs of stopping...

To discover the name and code, simply click the link below. You'll discover our expert's #1 medical technology pick... and you can decide for yourself whether to get invested today.

Click here to claim your free report.

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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!