The $412.4 million listed company is coming first in the race of international infant formula companies vying for exposure in the US after the 40 per cent hole left by Abbott Laboratories. The US is the world’s second-biggest infant formula market after China.
Bubs Australia will open up a second production line in its Dandenong facility and look at opening up a third to triple capacity.
ASX unveils new agribusiness index
The strong share price performance for Bubs and A2 Milk comes as the ASX unveils a new benchmark index tracking food producers and agribusiness companies.
Bubs Australia and A2 Milk are two of 25 companies that comprise the S&P/ASX Agribusiness Index (ASX:XAG),which includes household names such as Penfolds maker Treasury Wine Estates,poultry supplier Inghams,Bega Cheese,Costa Group,agribusiness giants GrainCorp and Elders,and salmon farming company Tassal Group.
ASX capital markets head of strategic delivery Ken Chapman said the new index would “shine a spotlight” on Australian agribusiness and primary producers that are now playing a more significant role amid “megatrends” of food security crises,geopolitical tensions and supply chain impacts,greater demand for higher-quality produce from Asia,concerns over climate risk,and emerging technologies disrupting the sector.
“All these factors are driving demand for capital,” Chapman told this masthead. “Companies involved in the sector need money to invest,to address all of these big challenges they’re facing.
“That means we[ASX] need to connect investors with those companies,” he added.
Data provided by ASX showed the ASX’s Agribusiness Index would have outperformed the benchmark ASX 200 between January 2017 and May 2022 at 40 per cent compared to 23 per cent.
“During times of market stress,the agribusiness index is a much steadier,better-performing sector. It stands to reason – everyone keeps needing to eat,” Chapman said.
“If you’re an investor and wanting better returns with less volatility,this is a sector that you should be looking at. That’s a key message.”
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