What’s Happening With ASX Infant Formula Stocks This Year – BAL, A2M, KTD?

  • Apr 20, 2019 AEST
  • Team Kalkine
What’s Happening With ASX Infant Formula Stocks This Year – BAL, A2M, KTD?

As per the S&P/ASX 200 Consumer Staples (Sector) on 18 April 2019, the YTD performance of the index is giving a positive return of 8.49% and a price return of A$11,224.34. Let us see how these three consumer staple stocks have performed in YTD.

Bellamy's Australia Limited

Bellamy's Australia Limited (ASX: BAL): is a producer and distributor of branded food product from the Consumer Staples sector. The shares of BAL have given a decent YTD return of 24.11%.

On 10 January 2019, Bellamy's Australia Limited announced that the Camperdown Powder Pty Limited where the company holds 90% interest has received a license extension from General Administration of Custom Council (GACC) till 31 December 2019. With the extension of the GACC license will facilitate the company to manufacture infant formula for export to China.

On 27 February 2019, the company announced its half-yearly results for FY2019. The transformational rebranding followed by the product upgradation in the market gained strong traction. The company delivered a winning product for an already strong brand. The group revenue for 1H FY2019 was reported at $130 million and EBITDA at $26 million on a normalized basis.

By the closure of trading on 18 April 2019, the closing price of the shares of BAL was A$9.410, marginally down by 0.106% as compared to its previous closing price. KTD holds a market capitalization of A$1.07 billion and approximately 113.37 million outstanding shares.

The a2 Milk Company Limited (ASX: A2M)

The a2 Milk Company Limited (ASX: A2M), another company from the consumer staples sector. The company is engaged in producing, marketing and selling branded dairy and infant formula products in targeted global markets.

The shares of A2M have generated a good Year-to-date return of 43.56%.

On 7 January 2019, the company appointed two executives within the senior leadership of the company. The purpose of their appointment was to further add the structural and technical capabilities to the existing strong and experienced group of executives. Melanie Kansil joined as the Chief Commercial Officer and Phil Rybinski as the Chief Technical Officer who is reporting to the Managing Director and CEO of the company.

On 20 February 2019, the company declared its half-yearly results for the period ended 31 December 2018. During the period, the total revenue generated by the company was up by 41% to NZ$613.1 million. EBITDA went up by 52.7% to $218.4 million. The company made a net profit NZ$152.7 million up by 55.1%. During the period the company reported an operating cash flow of NZ$112.3 million with a closing cash balance of $287.9 million. The revenue through the Group infant formula went up by 45.3% to NZ$495.5 million. The China label revenue went up by 82.6% and China consumption market share by 5.7%. There was an increase in the US milk revenue by 114.1%. The revenue from the Australian fresh milk went up by 11.7%.

In the first half of the FY2019, the company invested strongly to understand the Chinese consumer, channel dynamics and to improve brand awareness. Based on the strong 1H FY2019 results followed by growing market share in China, the company is now focused to re-invest the benefits of scale into increased marketing activities.

On 25 March 2019, a2 Milk Company Limited announced that Li Xiao is appointed as the Chief Executive Greater China. He will assume the role from 29 April 2019.

By the end of the trading session on 18 April 2019, the closing price of the stock was A$14.650, down by 1.875% as compared to its previous closing price. A2M holds a market capitalization of A$10.71 billion and approximately 733.4 million outstanding shares.

Keytone Dairy Corporation Limited (ASX: KTD)

Keytone Dairy Corporation Limited (ASX: KTD), a company from the Consumer Staples sector and is a manufacturer, packer and exporter of dairy and nutrition products. The company got listed on ASX on 18 July 2018.

The stock has generated a negative return of 5.19% on a Year-to-Date basis. Moreover, in the previous six months, the stock has provided a negative return of 26.26%.

On 23 January 2019, Keytone Dairy Corporation Limited announced the launch of two new premium powder products KeyDairy® Diabetic Powder and KeyDairy® Junior Formula.

On 25 January 2019, the company exercised its option to purchase additional land next to the existing properties in Izone Southern Business Hub which will enable the company to operate four manufacturing facilities.

On 30 January 2019, Keytone Dairy received AA status and accreditation from British Retail Consortium, which is a globally recognized body for food safety. Receiving the AA status and accreditation from British Retail Consortium further validates the quality of the food products manufactured by the company.

As per the Q1 results of KTD for the period ended 31 December 2018, the sales revenue was up by 18% as compared to its previous quarter. By the end of the Q1 FY2019, the combined cash balance of the company was $10,353,892.

As announced by the company on 19 March 2019, it has achieved organic certification from the AssureQuality for its facility in Christchurch in New Zealand for the production of organic instant whole milk powder and on 20 March 2019, it achieved Organic Exporter certification from the New Zealand Ministry of Primary Industries.

By the closure of trading on 18 April 2019, the closing price of the shares of KTD was A$0.350, down by 4.11% as compared to its previous closing price. KTD holds a market capitalization of A$54.75 million and approximately 150 million outstanding shares.


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