With positive company-wide developments and latest news on Lactalis’ contaminated baby formula to impact France sales to China, Australian infant formula companies are getting a boost.
 

Bellamy's Australia Ltd

BAL Details
 
Raised FY18 revenue growth forecast: Bellamy's Australia Ltd (ASX: BAL) rallied 24.8% on January 16, 2018 after the company raised FY18 revenue growth forecast for its core business and announced about acquisition of the remaining 10% stake in Camperdown Powder Pty Ltd. For FY18, BAL expects its core business, excluding the Camperdown business, to post a revenue growth of 30% to 35% compared to a previous forecast for a 15-20% rise. The company has also raised its core earnings margin forecast to 20-23% from earlier projection of 17-20%. BAL’s first half revenue is expected to be higher than the second half owing to sales shifting to first half at the back of higher winter consumption in China and Chinese New Year along with delays in Chinese registration for its branded products.
 

FY18 Action Plan (Source: Company Reports)
 
Moreover, BAL will be buying the remaining stake (10%) in China-registered Camperdown formula cannery for about A$3.6 million ($2.87 million), after getting the China Food and Drug Administration’s approval. The company had completed buying a 90% stake in Camperdown in early July 2017. With recent updates tracking well and turnaround in place, there seems to be good potential that the stock can unveil. We give a “Hold” recommendation on the stock at the current price of $13.68
 

BAL Daily Chart (Source: Thomson Reuters)
 

a2 Milk Company Ltd

A2M Details
 
Appointment of the key personnel: a2 Milk Company Ltd (ASX: A2M) has announced the appointment of Ms Jayne Hrdlicka as the Managing Director and CEO, who will succeed Geoffrey Babidge. Geoffrey Babidge will retire from his role, during calendar 2018 and Jayne will commence her role around the start of the FY 19. Additionally, A2M has reached the settlement in respect of the legal dispute with Lion-Dairy & Drinks Pty Limited. Both the parties have mutually agreed not to proceed with their cases against each other. Meanwhile, A2M stock moved up about 6.5% on January 16, 2018 and has entered into S&P/ASX 100 Index effective from 14 December 2017 and S&P/NZX 10 Index from 18 December 2017. However, based on the trading scenario, the stock looks “Expensive” at the current price of $7.42


A2M Daily Chart (Source: Thomson Reuters)
 

Wattle Health Australia Ltd

WHA Details
 
Secures Brand Slot for CFDA Accreditation of Goat Formulation:Wattle Health Australia Ltd (ASX: WHA) stock rose after the company entered into a Memorandum of Understanding (MOU) with Blend and Pack Pty Ltd (B&P) to nominate WHA’s Goat Infant Formula range as one of their three “brand slots” for China Food and Drug Authority (CFDA) Accreditation. WHA is one of the few Australian Companies who have secured two “brand slots” to obtain CFDA accreditation. This will be a strategic advantage for the company in servicing the largest market of nutritional dairy products with an increased product range. Meanwhile, WHA stock has already rallied 238.1% in six months as on January 15, 2018. As of now, we give an “Expensive” recommendation on the stock at the current price of $1.98


WHA Daily Chart (Source: Thomson Reuters)
 

Bubs Australia Ltd

BUB Details

Acquired NuLac Foods:Bubs Australia Ltd (ASX: BUB) has completed the acquisition of NuLac Foods Ltd. For this, the company had raised $20 million at 60 cents per share. As a result, BUB stock has already risen 157.14% in six months as on January 15, 2018 and was up 6.3% on January 16, 2018. The group has indicated to progress on its CFDA application, and is aiming to enhance scalability with pipeline of new products. We give an “Expensive” recommendation on the stock at the current price of $0.765 and look for additional catalysts.


BUB Daily Chart (Source: Thomson Reuters)

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