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The infant formula stocks A2M, KTD and BAL are performing decently on ASX, and with the consistent YTD returns from these stocks, it is worth having a look at each of them with their financial performances.
The a2 Milk Company Limited (ASX:A2M)
The a2 Milk Company Limited (ASX: A2M) has laid the foundation for having a2 Milk® from cows, capable of naturally producing only the A2 protein rather than A1 protein as found otherwise. The company invests significantly in the national brand advertising for the fresh milk categories and infant formula in Australia.
On the financial performance front, the revenue of the company stood at $613.1 million in the first half of FY19, an increase of 41.0% over the prior corresponding period and EBITDA stood at $218.4 million in the first half of FY19, an increase of 52.7% over the prior corresponding period of H1 FY18.
As per the outlook, the company is re-investing the benefits of scale into increased marketing activities in the second half of 2019, which is intended to drive brand awareness, primarily in China and in the US. The company is expecting to increase its marketing investment in FY20.
On the price-performance front, at market close 9th May 2019, the stock of a2 Milk Company Limited was trading at $15.110, with a market capitalisation of $11.2 billion. Its 52-week high and low price stands at $16.080 and $8.140, respectively. The stock was trading at a PE multiple of 47.370x.
Keytone Dairy Corporation Limited (ASX:KTD)
Keytone Dairy Corporation Limited (ASX: KTD) is involved in the manufacturing and exporting of formulated dairy products. The company is a trusted production partner in addition to Keytone Dairyâs own brands.
The fourth and final (31 March 2019) quarter of the company experienced a significant increase in total sales revenues and cash inflows from sales compared to the prior third quarter. The total sales revenue was up 31% for the quarter (1 January 2019 to 31 March 2019) compared with the prior quarter ended 31 December 2018 and the total cash receipts for the quarter were up 43% to $819,000 compared with the prior quarter. As at 31st March 2019, Keytone Dairy had a combined cash balance of $9,768,348.
On the price-performance front, at market close on 9th May 2019, the stock of Keytone Dairy Corporation Limited was trading at $0.485, a decrease of 16.379% during the dayâs trade with a market capitalisation of $87.0 million. The stock has yielded a YTD return of 50.65% with returns of 4.50%, 34.88% and 58.90% over the past six months, three months and one-month period, respectively. Its 52-week high price stands at $0.870 with a 52-week low price of $0.250.
Bellamyâs Australia Limited (ASX:BAL)
Bellamyâs Australia Limited (ASX:BAL) was founded in 2004 by a Tasmanian mother, with a view of providing nutritious organic food for children.
The ViPlus Dairyâs formula-series registration amendment has been approved by SAMR, but Bellamyâs organic formula-series application is pending. On 23rd April 2019, SAMR approved a label and artwork change to the existing registered ViPlus Dairyâs bovine formula-series.
On the financial activities front, the company reported a revenue of ~$130 million and EBITDA of $26 million in the first half of 2019 ( on a normalised basis). The decrease in EBITDA was driven by the net impact of the lower revenue along with improved gross margin, whereas the revenues were impacted by factors like delay in SAMR registration, planned reduction in trade inventory prior to the rebrand and observed a slowdown in category performance.
Moreover, the company maintained a strong balance sheet with the group cash increasing to $95 million, with no debts and continued access to a $40 million working capital debt facility.
The stock exhibited volatile performance with a negative return of 5.95% in the last one month and a gain of 8.05% in the last three months. The stock has a PE multiple of 39.360x with a current market capitalisation of $1.11 billion.
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