Since the start of the year, Splash Beverage Group, Inc. (OTCQB: SBEV) shares are higher by more than 92%. It’s well deserved. However, as strong as those gains are, two pieces of news earlier this week are expected to send the stock substantially higher. In fact, its uplist to the NYSE American Exchange alone is enough to draw massive attention from investors. But, its deal with China-based American Software Capital (ASC) in China to distribute ALL of its branded beverages could be a revenue-generating game-changer for SBEV. The excellent news is that those new revenues should come quickly. Here’s what happened:

On Monday, SBEV announced signing an expanded distribution agreement with American Software Capital to include its Copa Di Vino and Pulpoloco brands. That agreement adds to its previously announced distribution of hydration and recovery brand TapouT Performance, and SALT Naturally Flavored Tequila. Don’t underestimate the potential or the impact that ASC and this new deal can add.

In fact, the alliance is targeting a massive wine sales market in China that reached $69 billion in 2019. And those numbers are likely appreciably higher today. Of course, getting products into consumer’s hands is a challenge for American companies doing business in China. SBEV, with ASC, has that part covered.

As a matter of fact, ASC is one of the most respected Chinese manufacturers and distributors of consumer goods and brings a broad national reach. Better still, they operate out of a state-of-the-art facility, have robust marketing resources, and impactful relationships with chains and outlets throughout Greater China. And having the ability to leverage those relationships is vital for success.

Knowing the market is obviously important as well. 

Seizing Upon A $55 Billion Opportunity

While people overseas may think China is restrictive on its population, they are not when it comes to alcohol sales. In fact, China is the largest market for alcoholic beverages globally, according to a report from Mersol & Luo. Moreover, foreign alcohol brands are seeing significant growth. 

And, while sales of imported alcoholic beverages are still concentrated on the coast and large urban areas, demand in the less developed interior is rising, bringing the significant potential for established businesses and new entrants alike. The excellent news for SBEV and its investors is that at least two of its alcohol-based beverages are now positioned to benefit from these substantial markets. 

Copa Di Vino and Pupoloco sangria will lead the China expansion, two uniquely branded products targeting the surging demand for wine among a younger generation of Chinese who have rising disposable income. From a marketing perspective, the import and distribution of both target the Chinese consumer’s demand for Western spirits and non-alcoholic beverages. Better still, in addition to the expected near-term contribution to revenues, SBEV said it is concurrently working with ASC to establish local manufacturing and streamline operations to maximize profitability in the region.

Notably, Copa Di Vino and Pulpoloco sangria add to the previously announced distribution of hydration and recovery brand TapouT Performance, and SALT Naturally Flavored Tequila. Thus, the current SBEV product portfolio is entirely implemented into the China market. And with each product targeting multi-billion dollar opportunities, the great news is that SBEV expects to acquire more products through an aggressive strategy to purchase brands that meet specific standards. 

Even better, because those brands would likely fit into an already selective product portfolio, it’s likely they would enjoy similar distribution and again expand the agreement with ASC.

Keep in mind, SBEV is already in hyper-growth mode.

Momentum From A Huge Q1

In fact, SBEV revenues are surging, increasing 2058% from $112,003 to $2,407,701 on a comparative Q1 basis. That exponential rise is a combination of two things.

First, its products are excellent. Second, management understands its markets. Better still, beyond its uplist and expansion in the China markets, deals made last quarter set up Q2 to be even better. And with plans to aggressively add additional products to its portfolio, SBEV is positioning itself to become a beverage space juggernaut. Thus, for investors looking for undervalued growth stock opportunities, the search can stop at SBEV. In fact, the value proposition just got stronger.

Coming off its successful $9 million capital raise SBEV is better positioned than ever to create shareholder value from taking advantage of accretive opportunities. Better still, from an investor’s perspective, SBEV recently eliminated all convertible debt features, closing the door on equity holders’ ability to convert equity into debt. Hence, the balance sheet, product portfolio, and distribution agreements can all contribute with impactful intention. 

Moreover, its uplist and clean capital structure clears the way for SBEV to do what it does best- discover and develop innovative, exciting, natural, and healthy drinks that, as they say, delight the body and inspire the mind. And when they find them, expect the SBEV team to maximize the opportunities through a strategy and platform that rewards founders of beverage brands by helping them grow more rapidly and extending their market reach. And with results-driven determination, shareholder value should logically follow. 

Indeed, Splash Beverage Group is showing itself to be a rare breed of company and, at the same time, is proving it can compete with the world’s largest brands. Combining the sum of the parts, SBEV presents a highly compelling investment proposition, especially at current prices. 

Now, with two more products seizing upon massive revenue-generating opportunities overseas, that proposition just got stronger.

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