The Bubs Australia Ltd (ASX: BUB) share price fell 13% yesterday in what has been an incredible month for the infant formula business.

Bubs was founded in 2006 by Kristy Carr and was listed on the ASX in January 2017. Its infant formula is based on goat milk and it also sells organic baby food. Bubs recently acquired NuLac Foods, Australia’s largest producer of goat milk products, it also guarantees exclusive supply of local goat milk from Australia’s largest herd of milking goats.

The Bubs Share Price Dropped 13%

Bubs shares saw a heavy fall yesterday. There was no company news so it would seem as though some opportunistic investors were crystallising their gains.

Even just over the past month the Bubs share price has grown by 54% including the effect of the fall today.

Investors are getting very excited about its potential growth of the infant formula company because of a number of things it has recently announced including a strategic equity-linked alliance with Chemist Warehouse where its products will be sold nationally in stores as well as on Chemist Warehouse’s domestic and Tmall online stores.

It has also recently acquired infant formula producer Australia Deloraine Dairy which is one of only 15 canning facilities in Australia authorised by the Certification and Accreditation Administration of China (CNCA) for physical importation into China under regulatory requirements administered by State Administration for Market Regulation (SAMR).

Show Me The Money

Bubs is already generating impressive growth, even before the above new initiatives come into play.

In the company’s March 2019 quarter update, it showed that the third quarter gross revenue grew to $11.83 million, which was a 103% increase compared to last year. March 2019 gross revenue alone was $6.91 million, which shows things are building quickly.

China sales were up 884% compared to the prior year and represented 20% of the March 2019 quarter revenue.

I wouldn’t expect this level of growth to continue for a long time, but if it can replicate the early business success of A2 Milk Company Ltd (ASX: A2M) then the Bubs share price (and the two rapid ASX growth shares in the free report below) could be worth watching from here, particularly from this lower level.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.