Bellamy's Australia Ltd

BAL Details
·         Notice of Initial substantial holding: Bellamy's Australia Ltd (ASX: BAL) stock recovered over 6.2% on April 04, 2017. Janchor Partners Limited has become a substantial holder of the securities with 5.4% voting power. BAL stock was under pressure as the group updated its position for the registration of the products with China Food and Drug Administration (CFDA). The CFDA registration relates to ‘Chinese label’ (or PRC) product which is sold exclusively in China Offline Retail and have represented 14% of total sales in H1 17. The announced sale of Bega’s Derrimut facility has changed BAL’s planned CFDA registration process and will delay registration beyond January 2018. However, BAL continues to review the multiple alternative and accredited canning facilities and is also actively working with the China Offline Distributor SIIC to preserve continuity of supply of the ‘Chinese label’ (or PRC) product during the registration process.

·         Recommendation: BAL stock fell over 67.67% in the last six months (as of April 03, 2017) and we give a “Hold” recommendation on the stock at the current price of – $ 4.47


Clarification on CFDA brand registration requirements (Source: Company Reports) 

Whitehaven Coal Ltd

WHC Details
·         Ongoing bullish momentum: Whitehaven Coal Ltd (ASX: WHC) stock rose over 5.5% on April 04, 2017 at the back of coal price movement. WHC in the 1H 2017 has reported a net profit after tax of $157.5 million and the sales revenue grew 43% to $823.5 million. The operating EBITDA grew 205% to $324.8 million after the significant increase in coal price. The net debt was reduced to $628 million with gearing falling to 17%. Additionally, the full year saleable coal production is expected to be in the range of 21Mt to 22Mt.

·         Surge in Coking Coal Price: The Coking coal price has jumped by the most in almost four years after the flooding caused by Tropical Cyclone Debbie crippled exports from the world’s biggest exporter. The spot hard coking coal, which is a key ingredient in steelmaking, is reported to rise $23.40, or 15%, to $175.70 a metric ton as per the Steel Index. This is the biggest daily gain in data going back to May 2013.

·         Recommendation: WHC stock rose over 28.6% in the last six months (as of April 03, 2017) placing them at higher levels. We give an “Expensive” recommendation at the current price of – $ 3.27
 

1H 17 Financial Performance (Source: Company Reports)

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