I think the market reaction to the Appendix 4c speaks for itself. I think it is pretty impressive considering that the company can achieve operational breakeven in a year time with all other expansionary measures.
Profit margin is around 15%, which is quite low at the moment, however, for retailers reselling branded products, margins are always low. What's the profit margin for Chemist warehouse? Does it mean Chemist warehouse cannot survive the market?
One thing that is happening is that AU8 is essentially consolidating the Daigou platform. With its expansion and sales volume going up, it will not only in a better position to negotiate a better price for goods to be sold at its brick-and-motar shops but also online. In the same time, it is squeezing out all the small Daigou shops on the street.
Moreover, AU8 also acts as a middleman/a platform to promote Australian local products to Chinese buyers, which other retailers in Australia do not do directly.
I still think it is too early to tell.
AU8 Price at posting:
24.0¢ Sentiment: Buy Disclosure: Held
