Whitehaven Coal Ltd

WHC Details
 
Whitehaven Coal Ltd (ASX: WHC) the group’s saleable coal production for the March quarter 2017 declined over 4% yoy while the overall coal sales fell over 11% yoy as production from Narrabri was impacted by the scheduled longwall changeout. Managed coal sales in the March quarter stood at 4.9Mt, while Equity coal sales (excluding purchased coal) stood at 3.6Mt comprising 64% high CV thermal, 22% metallurgical coal and 14% low CV thermal coal. The sales mix for the quarter was influenced by higher than usual volume of low CV coal sales from Werris Creek compared to the first half of the year when low CV sales made up 8% of total sales.
 
Against a backdrop of supply/demand tightness promoted by Chinese production reform, strong demand for metallurgical coal by steelmakers during the December quarter, coupled with an anticipation of weather related disruptions in Australia, pushed metallurgical coal prices higher during the quarter. However, subsequent to the calendar year-end and with a relaxation of Chinese supply restraint driving metallurgical coal production, demand for metallurgical coal fell and spot prices weakened considerably. Following the impact of Cyclone Debbie, enquiries for metallurgical coal have increased substantially and expecting an increase in metallurgical coal sales in the final quarter of the year. WHC stock already generated an outstanding return of over 163% in the last one year (as at June 06, 2017), we give an “Expensive” recommendation at the current price of $ 2.58

Bellamy's Australia Ltd

BAL Details
 
Turnaround strategy on track: Bellamy's Australia Ltd (ASX: BAL), Australia’s leading producer of organic infant formula and baby food, remains on track to achieve full year revenue guidance of $220m - $240m after reporting a net profit after tax of $7.2 million and revenue of $118.3m for H1FY17. Despite the market challenges, the company is implementing a turnaround program aimed at improved earnings and it has amended manufacturing contract with Fonterra to extend the contract and apportion minimum volume commitments over a longer period. Further, it has already undertaken several structural improvements aimed at a material reduction in operating costs and staff numbers have been reduced to a sustainable level. Moreover, the company is reviewing its supply chain to reduce ingredient costs, consolidating Australian and Chinese reseller partners, while planning to increase the number of stores selling products in China by 1,600. Over the past three months, the stock has moved up by 27% owing to optimistic outlook. We give a “Hold” recommendation on the stock at the current market price of $ 5.52

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