Nutritional supplements company EZZ Life Science Holdings (ASX: EZZ), a genomic life science company, has entered into an agreement with service management company Aubay Pty. Ltd. trading as HIC for the exclusive distribution rights of two EZZ-branded products.
The two-year agreement is expected to generate additional annual revenues of at least $16 million for EZZ starting in FY24. EZZ’s full-year sales revenue for FY22 was $15.02 million, and the company reported sales revenue of $15.13 million in the half-yearly financial statements to December 31, 2022.
HIC is a membership-based, cross-border, social e-commerce platform that has served over three million consumers in the last three years. The official Australian entity for HIC, Aubay Pty. Ltd., will exclusively distribute two EZZ-branded products, EZZ NMN 175000 Gift Pack and EZZ L-Lysine Growth Capsule 60, across 27 countries, excluding Tmall, Douyin, and Pinduoduo and all channels in Australia and New Zealand.
HIC has a proven track record of working with over 30 international brands to provide premium international products to its members, primarily based in mainland China but spanning 27 countries, including the UK, Malaysia, the USA, and Japan.
Chairman of EZZ Life Science, Glenn Cross, said, “We are thrilled to have established a new partnership agreement with HIC. HIC’s established distribution channels in China and surrounding countries in Asia through its membership-based platform will enable EZZ to expand its reach and market presence. The Company looks forward to a successful partnership with HIC and anticipates the potential for further growth in the coming months.”
In Q3 FY23, EZZ posted a strong financial performance, with cash receipts from customers totalling $11.2 million, a 30% increase from the previous quarter, and a 182% increase from the same period last year. Operating cash flows increased significantly by 371% from the previous quarter to $2.8 million. The company’s cash position remains strong at $12.3 million at the end of the quarter, an increase of approximately $2.7 million compared to the previous quarter. In March 2023, the trading restriction on EZZ’s 30 million shares was lifted.
The agreement’s terms state that HIC has exclusive international distribution rights for two EZZ-branded products, with agreed minimum order quantities resulting in total annual revenues of at least $16 million for EZZ. The agreement term is two years.
The HIC agreement provides a unique opportunity for EZZ’s products to reach consumers outside of the company’s existing distribution channels, offering significant potential for growth.
In February this year, EZZ’s high-quality Nicotinamide Mononucleotide (NMN) supplement products gained market access in China as they were approved by the State Administration for Market Regulation (SAMR) as a food additive.
With the lifting of trading restrictions on EZZ’s shares and the recent approval of NMN as a food additive in China, the agreement with HIC presents a unique opportunity for growth for the company.
Alinda is a Business Reporter for The Sentiment
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