Bellamy's Australia Ltd

BAL Details
· First half performance dragged the stock lower: Bellamy's Australia Ltd (ASX: BAL) stock fell over 3.8% on February 24, 2017 after the group’s first half of 2017 update. The group’s revenues for the first half of 2017 fell to A$ 118.3 million as compared to A$ 139.4 million in the second half of 2016. On the other hand, this performance was as per the latest guidance. Bal delivered an NPAT of $7.2m which is again on track with the guidance. BAL forecasts their FY17 revenue to be in the range of $220 million to $240 million. The group revised the full year EBIT guidance to $19-23m from $22-26m. To combat the current challenging conditions in China, the group is making major reduction in costs. The group amended their manufacturing contract with Fonterra to extend the contract and to apportion the minimum volume commitments over a longer period. Bellamy’s also consolidated distribution to a smaller number of key resellers in China and Australia.
 
· Recommendation: BAL stock fall of over 70.08% in the last six months (as at February 23, 2017). We give a “Hold” recommendation on the stock given their commitments on long term prospects.

First half of 2017 performance by segment (Source: Company Reports) 

Myob Group Ltd

MYO Details
· Sell off by Bain Capital impacted the stock sentiment: Myob Group Ltd (ASX: MYO) stock fell over 6.77% on February 24, 2017 as Bain Capital offloaded their stake in the group. Bain Capital Abacus offloaded 100,000,000 ordinary shares of the group. Post this sale, Bain Capital would have 237,151,360 ordinary shares which account over 39.1% of the issued share capital of the Company. On the other hand, the company delivered a solid growth across all key financial metrics in FY16. Revenues surged 13% year on year (yoy) to $370.4 million while pro forma earnings before interest, tax, depreciation and amortization (EBITDA) enhanced 12% yoy to $171.5 million during the period. The group also declared a final dividend of 5.75 cents per share.
 
· Recommendation: We maintain a “Hold” recommendation on the stock at the current price of – $ 3.44

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