Navitas Limited

NVT Details
·         Rising student enrolments drove the stock sentiment: Navitas Limited (ASX: NVT) stock rallied 5.23% on March 30, 2017 as their student enrolments rose 8% across its University Partnerships Division during the first semester of 2017. The equivalent full time student units (EFTSU) rose to 19,047 across the University Partnerships Division during the semester against EFTSU of 17,679 in the prior corresponding period (pcp). Meanwhile, the Australian and New Zealand colleges’ enrolments rose 14% on a year on year (yoy) basis, driven by Australia’s globally competitive student visa regime, and the ongoing delivery of high quality outcomes across their colleges and the steady improvement of a number of newer colleges in the region. With regard to their enrolments in North America, there has been an increase by 4% on a yoy basis post sustained demand for Canadian higher education programs and ongoing demand by international students to study in the US. New enrolments in the US were impacted by rising visa rejection rates, while UK enrolments rose 1% on a yoy basis despite ongoing restrictive student visa environment in that region.

 
Rising University Partnerships (Source: Company Reports)
 
Recommendation: NVT stock rose over 4.5% in the last five days (as of March 29, 2017).We give a “Hold” recommendation on the stock at the current price of – $ 4.43

Bellamy's Australia Ltd

 
BAL Details
·         Concerns over CFDA registration for PRC products in China: Bellamy’s Australia Ltd (ASX: BAL) stock slipped by 8.3% on March 30, 2017 as group updated that the People’s Republic of China (PRC) will require infant formula products that are manufactured for sale in PRC to be registered with CFDA. As per BAL, their products for sale in PRC have been reported to face challenges as they can no longer be registered at Bega’s Derrimut canning line. The group does not anticipate to have registration in place by January 01, 2018. This delay is mainly at the back of time required to finish China Food and Drug Administration (CFDA) registration and further testing of up to 6 months of the PRC products at an alternate canning line. As of first half of 2017, the group’s PRC products comprised over $16 million worth of sales, which is 14% of total sales. On the other hand, the group reported that its manufacturing contract with Bega for other products is on track. Moreover, the group is seeking other options to offset the extent of any interruptions to the supply of its PRC products.
 
·         Recommendation: BAL stock already lost over 65.8% in the last six months. We maintain a “Hold” on the stock at the current price of – $ 4.10

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