JAT 17.4% 2.7¢ jatcorp limited

Undervalued is an Understatement.

  1. 2,229 Posts.
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    RECAP FROM PAST 4 QUARTERLIES HAS ME HYPED AND 100% REASSURED.

    JAT - JATCORP
    (SPECIALISING IN CHINA-AUSTRALIA CROSS BORDER TRADE)

    Extremely Vague Represenation of products sold / produced:
    Milk Formulas, Health Products, Cosmetics, and recently one of only 3 companies in Australia to start producing / distributing Plant Based meats (Vmeat).

    Current MC - 34M
    Current SP - 3.5c
    SOI: Approx 1B.

    Previous 4 quarterly results (All Cash Flow Positive):

    July 22, 2019 -
    $17,895,000 Revenue
    $2,877,000 Cash flow positive
    $7,830,000 Cash on hand.

    October 28, 2019 -
    $12,732,000 Revenue
    $1,059,000 Cash flow positive
    $9,912,000 Cash on hand

    January 30, 2020 -
    $20,805,000 Revenue
    $655,000 Cash flow positive (extra costs for the quarter, hong kong protests affected sales.)
    $7,230,000 Cash on Hand

    April 30, 2020 -
    $18,460,000 Revenue
    $1,648,000 Cash flow positive
    $5,714,000 Cash on hand (Funds and loans have been added since this for support in the growth of JATCORP - lots of money spent on expanding)

    The quarterly coming July 2020 needs $28,003,000 revenue for the directors to receivetheir performance shares for reaching the 80m milestone.

    My Favourite Highlights / Extract from these past 4 quarters:

    "During 2018 and 2019, JAT has invested heavily in transforming JAT from a simple tradingcompany dealing in other companies’ products on fine margins to become a manufacturer,distributor and retailer in its own right. By the end of March 2020, JAT expects the following to bein place:- It will be the only Australian company to have an end-to-end dairy business in China, thatis, the manufacture of its own products in Australia, its own distribution networkthroughout China and the first of its retail stores in China. "This is about to become reality, this was only delayed due to COVID-19.

    JAT has created its own distribution network for its dairy products in China. The demandfrom that distribution network is in the tens of millions of dollars and continues to grow.The product to satisfy that demand will be manufactured by ANMA (Factory 65% owned by JAT).JAT will operate its own retail outlet for its dairy products in Shanghai, withthe intention to establish more retail outlets in other Chinese cities.

    "Signing of an MOU with HIT Crown which opens the door to one million Chinese pharmaceutical companies, hospitals andclinics."

    "Guangzhou Niurui has agreed to purchase 1.5 million tins of Sunnya’s Neurio Lactoferrin milkpowder over five years, commencing with 100,000 tins in the first year and increasing by 100,000tins per year to reach 500,000 tins in year 5."

    "During June, Sunnya appointed HealthOne Pty Limited as its exclusive distributor for its productsin Australia, Vietnam, Indonesia and Singapore. The products to be distributed under theagreement include Neurio Formulated milk powder with lactoferrin, Neurio Formulated goat milkpowder with lactoferrin, Neurio Algae DHA (Kids) Gel Candy, Neurio Mushroom Powder GelCandy, Neurio Seaweed Calcium Gel Candy. HealthOne works with a broad range of healthcaresuppliers in Australia and overseas in retail, GP and specialist channels to position their productswithin retailers, especially pharmacies. HealthOne placed orders of 4 pallets in June 2019 andfurther orders in July 2019. "

    "JAT agreed to establish a joint venture company to be known as JWR InternationalLimited (“JWR”). JWR will develop, manufacture and sell cosmetic products in China, Hong Kong,Korea and Australia. Cosmetics is becoming a large, high-demand consumer goods market inChina and Asia. "

    "ANMA owns and operates a 5,000sqm manufacturing facility on 8,000sqm of land in westernMelbourne equipped with state-of-the-art processing lines specialising in handling infant formulamilk powder and other dairy products. ANMA is one of only 15 milk powder manufacturers inAustralia approved by China’s Certification and Accreditation Administration (CNCA) for exportinginfant formula into China under regulatory requirements administrated by China’s StateAdministration for Market Regulation (SAMR)."

    "JAT establishes plant-based meats business with Oppenheimer Pty Ltd, developsVmeat label and signs distribution agreement with Shanghai-based restaurant andcatering business. The first batch of products are scheduled to be shipped to Chinain late February 2020."

    "JAT renews distribution agreement with Cyclone for Neurio products and signs newagreements with Kigobaby and Kiss Kangaroo."

    "ANMA will have the capacity to deliver milk powder into several different sized containers and produce individually packed sachet products (such aslactoferrin) into three different pack sizes. It is expected the new machines will be installed andoperating in the factory by February 2020. On a two-shift basis, it is expected the factory canproduce around 620,000 tins of various sizes per month."

    "JAT signed a five-year manufacturing and supply agreement with a new customer, Beta A2Australia Manufacturing Pty Limited (“Beta”). The agreement requires JAT to manufacture andsupply Beta with Beta’s milk formula products branded “Farmers Beta A2” from its ANMAmanufacturing facility.JAT received an initial order for the first four months with first delivery in February 2020. Theamount of the order is more than $1.8 million. Beta provided a forecast for the eight monthscommencing June 2020 which amounts to orders worth more than $4.9 million."

    "On 29 October, JAT entered into an agreement with Sydney-based Oppenheimer Pty Ltd todevelop a range of plant-based meats to be sold into the China and other Asian markets. InNovember, JAT and Oppenheimer Pty Limited established a company, JAT Oppenheimer Pty Ltd,to carry on the new business. JAT Oppenheimer Pty Ltd is owned 50/50 between the parties. Thejoint venture with Oppenheimer will allow JAT to develop its own plant-based meat products andbrands.

    Oppenheimer is a private company based in Sydney which has a focus on being a world classingredient manufacturer and a leading provider of global food service brands in Australia, NewZealand, India, China, Southeast Asia and Singapore.The directors of JAT consider that the supply of plant-based meat products is becoming a fast-growing industry with a very significant market available in China and other Asian countries. JATintends to compete in this growing market in China and other Asian countries by offeringalternative Australian made products.

    JAT introduced the plant-based meat project at the second China International Import Expo(“CIIE”) in Shanghai held in November 2019, and it received high exposure on several Chinesemedia outlets."

    "In December, JAT Oppenheimer Pty Ltd signed a distribution agreement with Shanghai GurunWanfeng Catering Co. Ltd (“Shanghai Gurun”).The distribution agreement requires Shanghai Gurun to purchase a minimum of A$2 million ofproducts in the first year of the two-year agreement."

    "JAT announced plans to open a maternity and infant boutique in a prime retail location inShanghai in March 2020. JAT believes it will be the first Australian company to sell dairy productsthrough its own retail outlet in China, and it will complete an end-to-end supply and deliverychain. It has established its manufacturing facility in Australia, has developed its own brands andproducts, created its distribution network in China and finally, the first outlet of its own retailnetwork in a significant location in China.

    The boutique will be located directly opposite Shanghai Children's Hospital, Shanghai PregnancySchool, Shanghai Putuo Maternity & Infant Health Institute and Shanghai Oasis Kindergarten. TheCompany has executed the lease of the premises and the shop fit-out will commence after theChinese New Year holiday."

    "At the CIIE in Shanghai in November, JAT renewed its partnership with China-based health,wellness and maternity product distributor, Cyclone E-Commerce Co., Ltd. Under the companies’existing agreement from June 2018, Cyclone agreed to purchase over A$7.5 million in productover the following 12 months. Cyclone met that sales target, leading to the agreement beingrenewed for a further 12 months.Cyclone will distribute JAT’s range of Neurio milk powder products, the full range of Neuriovitamins and new products that JAT is set to release in the near future. The next 12 months’ salestarget for all JAT products to be sold by Cyclone is A$17 million."

    "Subsequent to the end of the December 2019 quarter, JAT signed a Distribution Agreement withOcker Products Pty Ltd (“OPP”) for the non-exclusive distribution of JAT dairy and other productsin China for the next three years.OPP is based in Australia and has a strategic partnership with Beijing Grain Group Co Ltd (“BGG”)and Beijing JingLiang Logistics Co Ltd (“BJL”) to procure food and farm produce on behalf of BGGand BJL.

    The Distribution Agreement between JAT and OPP is to facilitate OPP meeting orderswhich it receives from BGG and BJL.OPP have agreed, in the first year of the Distribution Agreement, to purchase a minimum of A$80million of JAT’s dairy products and any other products supplied by JAT. Although no minimumamount has been specified in the Distribution Agreement for years 2 and 3, JAT has been advisedby Ocker that BGG purchased volumes of products from sources outside China during 2019 of fargreater than the amount proposed to be supplied by JAT. Accordingly, JAT believes there is a realopportunity for it to fulfil BGG/BJL orders greater than A$80 million per year, subject to it obtainingadditional funding and increasing its manufacturing capacity."

    "Record monthly revenue of $8.5 million achieved in February and $8.1 million inMarch, driven by increased lactoferrin sales due to emergence of the COVID-19pandemic"

    "JAT forms research partnership with University of Sydney to develop antiviral foodsupplement"

    "The $5 million in new funding we recently secured will allow JAT to reach even higher turnoverlevels. It will empower us to increase raw material and inventory levels as well as acquire andinstall new machinery at our ANMA facility to develop and produce the new products which ourcustomers are demanding. We have developed the world’s first Lactoferrin with Camel MilkPowder and another new A2 protein Children’s Milk Powder, and look forward to bringing these tomarket."

    "ANMA entered a five-year manufacturing and supply agreement with Beta in November 2019. The agreement was for an expected total amount of $6.7 million in the first year, which wouldcommence with an initial order of $1.8 million followed by orders of over $4.9 million scheduledfor the eight months commencing June 2020.JAT reported ANMA’s receipt of the initial order of $1.8 million from Beta, together with aninitial deposit of $340,000."

    "Under the agreement, Ultinature will place orders with ANMA for the manufacture of fourspecific Ultinature products as well as any new products which Ultinature may develop. Theagreement specifies an indicative non-binding cumulative order quantity over three yearswhich, if met, represents approximately $6 million in revenue to ANMA over the period. "

    "The research is expected to be complete in April 2021. JAT will work with the University ofSydney to ensure that the compounds which are developed through the research are registeredwith the Australian Therapeutic Goods Administration, so that marketing can commence inAustralia, which is expected in late 2021 or early 2022. JAT will in parallel seek correspondingapprovals with regulatory authorities outside Australia, where required, in order to commencemarketing in the same timeframe.Assuming the research is successful, JAT expects to own a range of compounds based onlactoferrin which will be an effective treatment of conditions including herpes simplex virus Type1, influenzas and norovirus."

    Big news to come:

    Shanghai Store Updates
    New Website Release
    Vmeat Updates

    Quarterly (Could be today, though after 4 consecutive positive quarters, they do not have too either.)
    Annual Report (Hopefully first profitable, given there is no write offs)
    INVESTOR PRESENTATION! (No wonder this thing is taking so long, look how much information I have from those quarters!)

    Goodluck guys, I believe our patience will be rewarded.

    As always this is not financial advice, all of the above is in my opinion and do your own research.
    Last edited by OnlyTheBest: 30/07/20
 
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