The share price of Bellamy’s Australia Ltd (ASX: BAL) has risen by 46% in the first three months of 2019.
Bellamy’s is an ASX-listed organic infant formula and organic food company that was founded in 2004 in Launceston, Tasmania. It was the first company to offer an organic infant milk formula range to Australian mothers. It is now becoming a growing presence in the large Chinese market.
The Bellamy’s Share Price Has Gone Nuts In 2019
There are few shares on the ASX that have done as well as Bellamy’s since the start of 2019. However, bear in mind that the Bellamy’s share price is actually 44% lower than it was a year ago – it’s currently staging a recovery.
Just like late 2016, the recent fall of the share price was down to the fact that Bellamy’s was suffering from Chinese troubles.
Several months ago Bellamy’s pointed to the fact that China cross-border growth was slowing and competition was rising from both availability and pricing from local and global competitors. There were also lower births in Tier 1 and Tier 2 Chinese cities during 2018. That’s why management aimed to grow in Tier 3 and Tier 4.
However, despite a 16% revenue fall of Bellamy’s revenue to $127.7 million in the recent result, investors seem to getting more positive about Bellamy’s future.
The Chinese State Administration for Market Regulation (SAMR) registration is still taking its time but at least the company hasn’t said it has been denied.
Bellamy’s CEO Andrew Cohen recently commented, “The Board and Management Team remain strong believers in the medium-term outlook, and the ability to evolve Bellamy’s from Australia’s #1 organic brand, to Australia’s #1 organic portfolio.”
Time to buy Bellamy’s shares?
Bellamy’s has been a strong performer and it remains significantly below its recent highs in 2018. If/when it receives its SAMR registration I would not be surprised to see the share price kick on, but that’s taking a bet that it does in-fact get the required approval.
According to CommSec estimates, it is valued at 33 times FY20 earnings.
For now, it could be a wiser move to consider the ASX growth shares revealed for free in the report below.
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