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.
For Money Morning