Bellamy’s Share Price 21% Higher and Rising

What happened to Bellamy’s share price?

Shares of Bellamy’s Australia Ltd [ASX:BAL] gained a whopping 21.44% today. Shares were trading at $13.31 at time of writing.

Why the share prise increase?

The organic infant formula maker upgraded their full year profit guidance for FY18 from 15–20% to 30–35%. They also expect their earnings margin to increase from 17–20% to 20–23%.

The company anticipates higher revenues coming in from China during the second half of the year, mainly due to higher winter consumption and more Chinese label sales after suffering delays in the first half of the year

Bellamy’s is looking at around $18 million in total sales.

The company also announced they will be buying the remaining 10% of Camperdown for a total of $3.6 million.

Camperdown is a Victorian canning facility which Bellamy’s purchased 90% of last year to satisfy Chinese regulatory demands.

What now for Bellamy’s?

The company’s growth in China slowed in 2016. Since then, the company has a new board and management team, and has implemented a turnaround plan.

While the company still sees challenges to their turnaround plan, they also see big opportunities as they focus on reducing costs and reinvesting for long-term growth.

PS: China is set to boom again. If you are looking for Aussie companies that could benefit from China’s new economic surge, go here.

Selva Freigedo,

For Money Morning

Selva Freigedo is an analyst at Money Morning. She has a background in financial economics, but what makes Selva´s experiences different to many are the places she has lived and worked. Born in Argentina, she has also lived in Brazil, the US, Spain, and now Australia. She has seen up close many of the economic phenomena that worry Fat Tail Investment Research readers, like hyperinflation, bank bail-ins and governments burdened with so much debt it cannot possibly be repaid.

Every week, she goes through each article, research note and recommendation produced by our experts around the world to give you information on how to build and protect your wealth. Selva packages the week’s best ideas into one easy to read report: Port Phillip Insider Extra.

Money Morning Australia