Exciting Infant Formula Stocks – BAL, WHA

  • May 26, 2019 AEST
  • Team Kalkine
Exciting Infant Formula Stocks – BAL, WHA

Below-mentioned Infant Formula Stocks have witnessed significant strategic progress in the recent past. Let’s take a look at each of them in greater detail-

Bellamy’s Australia Limited (ASX: BAL)

Australia’s leading food and beverage company, Bellamy’s Australia Limited’s (ASX: BAL) shares have witnessed an uplift of 26.80 percent in the past six month as on 23 May 2019. In the recent past, the company has experienced substantial strategic progress. Recently, the company announced that its new Bellamy’s branded series had received approval from SAMR.

In the first half of FY19, the company reported group revenues of $130 million (on a normalised basis), which was lower than the group revenue of $175 million reported in the previous corresponding period, mainly due to delayed SAMR registration, a planned reduction in trade inventory prior to the rebrand, and a slowdown in the category performance.

1H 19 Group Revenue VS PCP (Source: Company Reports)

Based on the 1H19 results and early 2H19 trading update, the company forecasted its revenues for FY19 to be in the range of $275 million to $300 million. Further, the company is expecting FY19 group EBITDA to be 18% to 22% of revenue, reflecting increased investment in marketing and the China team.

The company’s medium-term outlook remains compelling, underpinned by category fundamentals, company’s differentiated position and an aggressive three-year growth strategy, targeting $500 million plus revenues by FY21. The company is pursuing a long-term premium brand strategy, targeting a balanced scorecard of volume growth and margin expansion over five years.

The company’s stock has provided a YTD return of 20.95% as on 23rd May 2019. BAL’s shares last traded at $9.100, with a market capitalisation of circa $1.04 billion as on 24 May 2019.

Wattle Health Australia Limited (ASX: WHA)

Wattle Health Australia Limited (ASX: WHA) offers superior quality, organic and sustainable products to the customers by using natural ingredients derived from Australia’s natural resources. Currently, the company is progressing with the construction of Australia’s first dedicated organic nutritional dairy spray dryer via Corio Bay Dairy Group (CBDG), a joint venture, of which WHA is part of.

As per the update published on 23rd May 2019, the company soon is going to begin the installation of concrete panels of the dryer and the evaporator building. In late July 2019, the company will receive the first of the five shipments of dryer/evaporator equipment.

The company also entered into an agreement with Mason Group Holdings Limited to acquire 75% of Blend and Pack (B&P), a leading independent, nutritional dairy processing and packaging business in Australia, for US$55 million, taking its holding to 80%.

The company is expanding its product portfolio and distribution channels via successful importation of natural baby food range into the Indian market. The company is also importing its products in the lucrative Chinese market.

In the first half of FY19, WHA reported revenues of $363,000 and a loss of $4.3 million.

The company’s stock has provided a YTD return of -20.88% as on 23rd May 2019. WHA’s shares last traded at $0.710, with a market capitalisation of circa $140.04 million as on 24 May 2019.


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