Blackmores Limited

• Higher valuations: Blackmores Limited (ASX: BKL) plunged over 13.2% on April 11, 2016 partly due to its recent update of reporting that China continues to be a major growth strategy for the group. This update concerned the investors given the rising competition in China from its peers like Bega Cheese and A2 milk. Moreover, there are concerns over the possible regulation changes and ongoing slowdown impact in business in China. In fact, few media pieces suggest that BKL has not been able to win a great share of the $173 million formula market in Australian pharmacies. BKL surged over 248.5% in the last one year driven by its outstanding performance in China but fell over 7.7% (as of April 08, 2016) during this year to date. BKL is also trading at a very high P/E with a low dividend yield.
• Recommendation: We maintain our “Expensive” recommendation on the stock at the current price of $176.96

Alumina Limited

• Bauxite supply contracts: Alumina Limited (ASX: AWC) fell over 3.9% on April 11, 2016. This seem to be having some effects flowing down from the update from Malaysian government who extended the bauxite mining ban for three more months. On the other hand, the group already made bauxite supply contracts from its present mines with customers in China, Europe and Brazil of greater than $350 million for two years. AWC has a strong contract pipeline and customers with solid assets. However, the ongoing volatile conditions in commodity markets led to a fall of over 6.3% in the last four weeks (as of April 08, 2016).
• Recommendation: Despite the above, AWC is trading at a reasonable valuation with an outstanding dividend yield. We maintain our “BUY” recommendation on the stock at the current price of $1.225