The Jatenergy Ltd (ASX: JAT) share price rose higher in morning trade after it announced an increase in sales of its lactoferrin range due to the coronavirus outbreak. Jatenergy shares have since dropped back down to their opening price of $0.50.
Jatenergy is a specialist in Australia–China trade and is focused on growth within the Australian health and wellness consumer goods export industry. Its activities include the origination, development and manufacture of a range of consumer products, and the sale of client and in-house products, primarily in Australia and China.
In particular, Jatenergy has developed a range of lactoferrin dairy products. The company claims that lactoferrin plays an important role in modulating the immune system, both systemically and in the gastrointestinal tract.
What did Jatenenergy announce?
Jatenergy reported high demand in China for its Neurio ranges of dairy products, which contain lactoferrin, since December 2019. Jatenergy claims that this demand appears to be driven by the emergence of the coronavirus.
Sales of the Neurio lactoferrin brands in January 2020 totalled $3.44 million. This compares to sales of $407,000 in January 2019. In the 6 months ended 31 December 2019, sales of all Neurio products totalled $9.4 million.
Jatenergy reports that demand for its lactoferrin brands from its distributors in China is continuing, with orders for February and March at levels well in excess of previous periods. Orders so far for February 2020 are $2 million, compared to $1,099,917 in February 2019. For March 2020, orders so far are at $1.8 million, compared to $388,714 in March 2019.
JAT's ANMA factory has also reported an increase in orders from its customers that produce dairy products containing lactoferrin. ANMA says it will increase its production to meet these orders and the increased level of orders which it expects to receive over the next few months.
It is unclear whether the movement of people in China will prevent the sales and distribution of the Neurio products to consumers.
Shanghai retail store on track to open
Despite the disruption in China caused by the coronavirus, Jatenergy anticipates that the opening of its Maternity and Infant Boutique, announced in December 2018, will still open in Shanghai in March 2020.
