The infant formula and baby food company’s shares dropped a disappointing 27% last month.

Investors headed to the exits in their droves last month after Bellamy’s released a full year result that fell short of expectations.

In FY 2019 Bellamy’s posted a 19% decline in revenue to $266.2 million and a 36% decline in normalised net profit after tax to $30.1 million.

Management advised that the weak result was driven by a deeper than expected level of trade destocking in the third quarter, a lower Chinese birth rate, increasing competition in the key China market, and delays to its SAMR accreditation.

In respect to the latter, the company continues to wait for the SAMR accreditation required to sell its key infant formula products directly in the lucrative China market. (Source: The Motley Fool)

HPA-China commentary: the listed excuses for the decline are all tied to China. For many, Australian companies, China has become the backbone of their companies’ growth and valuation. Unfortunately China’s market changes quickly and ongoing regulatory swifts can leave companies out in the cold. China has been and continues to be a great market with lots of potential. However for many, that potential is not always easy to grasp without aches and pains. (Source: HPA-China)

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