# BAL - Bellamy's Australia



## System (7 August 2014)

Bellamy's is a Tasmanian-based branded food business that offers a range of organic food and formula products for babies and toddlers. Bellamy's products are all Australian-made and certified organic.

http://bellamysorganic.com.au


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## jaeyon (19 August 2014)

up 40% since floating earlier this month!


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## skc (19 August 2014)

Forecast NPAT FY15 to be $5m by growing revenue ~170%. They have a tiny market share (~3%) so it doesn't take much industry growth to increase company sales. At the same time, I doubt too many people are going to miss them if they disappear from the shelves. 

At share price of $1.42, market cap is $135m so PE is pretty high even if you accept next year's growth as given (which isn't for obvious reasons).


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## VSntchr (19 August 2014)

skc said:


> At the same time, I doubt too many people are going to miss them if they disappear from the shelves.
> .




Yeah. I had a look at the prospectus, but I passed before I even began with the numbers. Not something I'd be comfortable investing in. It appears its products are going on the whole healthy "organic" route - but to me its very superficial and easy to see through...its pitching on a trend which I don't see as sustainable. 

Just my opinion and it may in-fact do really well..


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## skc (19 August 2014)

VSntchr said:


> Yeah. I had a look at the prospectus, but I passed before I even began with the numbers. Not something I'd be comfortable investing in. It appears its products are going on the whole healthy "organic" route - but to me its very superficial and easy to see through...its pitching on a trend which I don't see as sustainable.
> 
> Just my opinion and it may in-fact do really well..




Do you have any children? Your mindset changes a little about these things when your own bloodline is involved.

Building a brand that successfully says "organic" will a huge moat, particularly in China where food safety is headline news every now and then. But to build such reputation will take plenty of hard work and investments especially in a market like China. 

I think as a company it might do pretty good... just don't know about investing at current prices.


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## VSntchr (19 August 2014)

skc said:


> Do you have any children? Your mindset changes a little about these things when your own bloodline is involved.



No, BUT...if it's the healthy aspect your coming from - I take health very seriously and I know where you are coming from with this statement. I go to lengths that I imagine the general public would find silly in pursuits of healthy living. 



skc said:


> Building a brand that successfully says "organic" will a huge moat, particularly in China where food safety is headline news every now and then. But to build such reputation will take plenty of hard work and investments especially in a market like China.



Yes I agree, but my issue is that I think the way that corporates have jumped onto the organic bandwagon is a trend that the "clued-up" healthy crew understand is just marketing and spin - and perhaps won't be long until this is more widespread knowledge. This is just my own hopefully theory, I have no idea what will really happen..

We could start talking about what really constitutes healthy, but probably a rabbit hole to be avoided for now...



> I think as a company it might do pretty good... just don't know about investing at current prices.



I agree. Just because I think about the health aspect of their products in a different way to what they want me to, doesn't mean they won't succeed!


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## skc (19 August 2014)

VSntchr said:


> Yes I agree, but my issue is that I think the way that corporates have jumped onto *the organic bandwagon is a trend *that the "clued-up" healthy crew understand is just marketing and spin - and perhaps won't be long until this is more widespread knowledge. This is just my own hopefully theory, I have no idea what will really happen..




It will never be widespread knowledge. There is may be 0.1% of "clued-up" healthy crew in the universe, vs 97% easily spooked parents.

http://www.abc.net.au/tv/thecheckout/clips/#

See the "Guilty Mum" segment and particular the one on Food. It's funny because it's true!


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## ROE (19 August 2014)

my 2c I don't know anything about this business
Just weight in on the debate about organic food ..

I am with VS on this one 
We are a very active and healthy family everyone one of us including the children

We hike, cycle, run, kayak and anything else we want to try
I spend thousands each years on outdoor gears 

I just spent another thousand bucks on hiking shoes
I spent on Everything outdoor but so call health food, it is just fab

Most of this food stuff is fear based 
We eat junk foods and everything in between
Exercise and moderation eating is all you need ..
I can't remember when was the last time one of us is sick


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## peter2 (4 March 2015)

Interesting price spike up this morning. No official news.


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## Tyler Durden (28 July 2015)

I just learnt of this company a few days ago, looks very interesting:


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## Tyler Durden (29 July 2015)

Of course, the day after I post about it, the SP falls down to $4.69.


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## Junior (30 July 2015)

Tyler Durden said:


> Of course, the day after I post about it, the SP falls down to $4.69.




I started watching this stock when it was <$2 and thought it was far too expensive 

Amazing run up.


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## Tyler Durden (29 August 2015)

On 21/8/15 BAL announced they would be paying a dividend of $0.02865 per share.

As of now the SP is $5.85.


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## peter2 (8 September 2015)

BAL like BKL shows that investors are willing to pay heaps for a company that successfully gets its products into the Chinese market (which is HUGE).


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## Tyler Durden (8 September 2015)

peter2 said:


> BAL like BKL shows that investors are willing to pay heaps for a company that successfully gets its products into the Chinese market (which is HUGE).




It's on a good run, particularly in these rather nasty conditions. I wonder how long it will last.


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## silence (19 December 2015)

Tyler Durden said:


> It's on a good run, particularly in these rather nasty conditions. I wonder how long it will last.




Still holding?

Very solid close last Friday. Hoping it manages to break through the recent all time high for another run. The A2M shock EBITDA upgrade should lend even more strength to the whole baby food / quality food industry.

Logarithmic and regular charts shown. Worst case scenario, retrace to $12 support?


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## Rainman (31 December 2015)

I'd encourage those contemplating on riding BAL higher to read this article before they do: http://www.gurufocus.com/news/29398...-with-stan-druckenmiller-and-sir-isaac-newton.


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## Triathlete (31 December 2015)

Since there has been a discussion on Bellamy's and the fact that a bubble is forming can those that have a Fundamental analysis view.

Are you able to crunch these particular numbers that I have taken from the Lincoln Indicators stock doctor site and give their view as to where  the share price could be if these forecasts are met?

They currently have a satisfactory rating on the company.

                              JUN 16                         JUN 17            

ROA%                      50.45%                      103.99%
ROE%                      51.23%                        70.51%
Revenue growth        91.58%                        52.40%
EPS growth              173.32%                      106.04%
PEG                           0.31

Consensus Price target currently $14.00
1st year return incudes dividends 173.20%


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## Rainman (31 December 2015)

Triathlete said:


> Since there has been a discussion on Bellamy's and the fact that a bubble is forming can those that have a Fundamental analysis view.
> 
> Are you able to crunch these particular numbers that I have taken from the Lincoln Indicators stock doctor site and give their view as to where  the share price could be if these forecasts are met?
> 
> ...




I like the way that you say "... _if these forecasts are met_". That is the critical issue: BAL shareholders had better hope that these forecasts are met come reporting season because if they are not this thing will re-rate with a vengeance.


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## Triathlete (31 December 2015)

Rainman said:


> I like the way that you say "... _if these forecasts are met_". That is the critical issue: BAL shareholders had better hope that these forecasts are met come reporting season because if they are not this thing will re-rate with a vengeance.





Yep, that is what I mean....I usually find it hard to believe these forecasts especially for a new company without sufficient data to analyse.


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## CanOz (31 December 2015)

Chart of BAL, answer me this Rainman, is this equity still in an uptrend?


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## CanOz (31 December 2015)

What about this equity Rainman, i 'think it could be in a bubble, should we exit?


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## Rainman (1 January 2016)

CanOz said:


> Chart of BAL, answer me this Rainman, is this equity still in an uptrend?




But you've sold out of it - which brings us back to the original question: why do you recommend that others enter a very bubbly stock that you have already sold out of?


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## CanOz (1 January 2016)

Rainman said:


> But you've sold out of it - which brings us back to the original question: why do you recommend that others enter a very bubbly stock that you have already sold out of?




Nah, I sold out because I went flat on everything except one currency position while on holidays. Otherwise I'd likely still be in BAL, or possible just exited, I didn't see yesterday's session result.


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## skyQuake (5 February 2016)

What a result! Management moves everything forward by 2 weeks to support the share price


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## skc (5 February 2016)

skyQuake said:


> What a result! Management moves everything forward by 2 weeks to support the share price




Yes that was a very effective self-issued speeding ticket.

I had a small short on it when it went into the news so had to scramble and flip at the match. End up cutting my loss to something pretty minimal...

All of a sudden they are trading at ~PE 30x which is not really that much of a stretch.


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## mcgrath111 (2 December 2016)

Expected to see BAL drop sooner or later; did not see 43% though!


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## skc (2 December 2016)

mcgrath111 said:


> Expected to see BAL drop sooner or later; did not see 43% though!




No... not when the AGM was merely 6 weeks ago, and not when A2 just issued a sterling update a few weeks ago. This is a major shocker by all accounts.

When a company's announcement starts with "FY17 is a transitional year" you know there's trouble. But no I didn't really think -40% was possible.

With the new forecast of $240m revenue @ 20% EBIT margin, NPAT is going to be ~$33-34m (BAL has little debt, thank goodness) depending on the tax rate. This equates to EPS of 34.5c compare that to FY16 EPS of 39.8, a fall of some 15%. Now where it hurts is that consensus was looking for 63c a share (per article below). So it's a shocker.

An AFR article after the fact.

http://www.afr.com/brand/chanticlee...ss-after-share-price-collapse-20161202-gt2kan

P.S. Lol now there's a class action thread on the other forum!


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## Triathlete (4 December 2016)

I thought I would do a quick analysis on Bellamy's since we saw quite a drop last week.

Now most of you know that I get my fundamental analysis using www.lincolnindicators.com.au

as I do not have the time to do it myself.

Using their assessment I always like to check the charts to see if things are lining up before I place my hard earned into any stock that may have potential based on Fundamentals.

Now based on their previous analysis they had this particular stock as a Star Growth Stock,but looking at the last 3 months at no stage in my opinion was this a buy using Technical analysis and was actually trending down towards a Long term trend line.

There was a number of exits that may have been taken and certainly an exit should have been taken once the trend line was broken (my opinion only).

I have attached my chart ,I would like to here from those that may have been trading this particular stock or may have their own view regarding this stock.

Cheers
Triathlete


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## Stomper (12 December 2016)

ASX: BAL 12/12/2016	08:42am AEDT	Trading Halt

The Trading Halt is requested under Listing Rule 17.1, pending the release of an updated announcement of the impact of trading conditions on the Company’s expected financial result.

Not looking good, given that only 10 days earlier the Company issued updated guidance which saw their share price halve.

Also not a good look that the CEO and Chairman sold two large parcels of shares in August….

29 August 2016
As disclosed in the Appendix 3Y lodged with ASX today, Bellamy’s Australia Limited
(ASX: BAL) Managing Director & CEO Laura McBain has sold 165,000 shares, and Chair Rob Woolley has sold 200,000 shares. Laura and Rob will be investing in personal assets and supporting private family investments.

and more in March….


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## fanger (23 December 2016)

Any speculation on why they are suspended and for how long it might be?


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## pixel (23 December 2016)

fanger said:


> Any speculation on why they are suspended and for how long it might be?




http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01815122
they *asked *to be suspended until Jan 13. You can also find the reason in an earlier announcement when they first asked for a trading halt:
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01811795

key words are "impact of trading conditions on ... financial results"


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## skyQuake (11 January 2017)

$1m cash left. Uh oh!

Whatever happened to the $30m+ mentioned at the AGM?


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## skc (11 January 2017)

skyQuake said:


> $1m cash left. Uh oh!
> 
> Whatever happened to the $30m+ mentioned at the AGM?




It's $1m net of debt so for all we know they burned more than $30m. What we do know is that a large part of that went into inventory... the number grew from $68m at end of  Jun 16 to now $105-110m at end of H1 FY17. This doesn't include the shortfall payment either. It has been expensed but the cash hasn't been paid.

Assuming this inventory is recorded at cost, it means they have some 7-8 months of inventory built up. It looks like these stock cant' be sold after Jan 2018 into China due to the regulation changes. Is there a write off coming?

I listened to the Q&A and it feels that management are not truely on top of things yet. I don't get the feel that BAL's manufacturing strategy has been organised to respond to the Chinese regulation changes. Each manufacturer can only have 3 brands going into China... Is BAL considered a manufacturer or is Fonterra / Bega the manufacturer? Someone (a private investor I think) asked the question if BAL is sure that FSF will choose BAL as one of it's 3 brands... and there was no straight answer given.

The acting CEO was the COO... surely he was as much responsible for the forecast/sourcing/contracting strategy that led to the current state of play?!The only mistake BAL made was forecasting - everything else was a response to that erroneous forecast. There doesn't seem to be anything in the material to explain how this might be improved.

The deal with FSF is also interesting in that, there seems to plant a poison bill for any future change of control transactions. But is that really the case? If FSF terminates the contract on this provision, does it mean BAL is no longer up for the shortfall payment? IF so, doesn't it just give a 3rd party an incentive to buy a large stake in BAL in hope of triggering this clause? I am somewhat confused what FSF thinks it can achieve.

Other questions I have relates to what else can be done to monetise the inventory? Can the raw ingredients be resold or have any alternate use? Can the finished products be "clean skinned" without destroying the brand?

Anyhow... it's a pretty solid rise from the low today. We will have to wait until we see how much of this is short covering.


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## McLovin (11 January 2017)

skc said:


> The deal with FSF is also interesting in that, there seems to plant a poison bill for any future change of control transactions. But is that really the case? If FSF terminates the contract on this provision, does it mean BAL is no longer up for the shortfall payment? IF so, doesn't it just give a 3rd party an incentive to buy a large stake in BAL in hope of triggering this clause? I am somewhat confused what FSF thinks it can achieve.




It's pretty poorly worded and ambiguous. The previous agreement has "change of control" termination rights. So does the new one. AFAIK, "effective control" is no different to "change of control".

The way I see BAL is it's a manufactured milk company that owns neither cows nor manufacturing equipment. They got caught in a jetstream that sent their sales and gross margins ballistic in FY16. Unlike iron ore, or olive groves, it doesn't take too long to bring on capacity (cows or P&E) to meet an increase in demand. Margins at 10% over the cycle would be a pretty good outcome. With the build-up in inventory, and the slowing of sales, the price still looks pretty rich, imo.


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## skyQuake (11 January 2017)

Agree, still seems expensive at current price = 13-16x unerlying EBIT
I suppose the hedge funds short this are in the money by $10 or so, and don't really care to hold through the pain of wrangling a few more cents or even dollars out of it

This is definitely a fresh take on 'turnaround story'


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## JTLP (11 January 2017)

Won't there be some overhang of a class action on this?


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## skc (11 January 2017)

McLovin said:


> The way I see BAL is it's a manufactured milk company that owns neither cows nor manufacturing equipment. They got caught in a jetstream that sent their sales and gross margins ballistic in FY16. Unlike iron ore, or olive groves, it doesn't take too long to bring on capacity (cows or P&E) to meet an increase in demand.




The management speak is the supply chain whipsaw effect. Plus you have an unique situation where unsophisticated Dai-gu's were a large part on the supply chain so it exacerbated the perceived end demand. Then BAL went and undercut the Dai-gu's who helped create the demand growth in the first place.



McLovin said:


> Margins at 10% over the cycle would be a pretty good outcome. With the build-up in inventory, and the slowing of sales, the price still looks pretty rich, imo.




Premium and niche is probably where they should aim. I think they can achieve margins much higher than 10% with a premium positioning. What they don't have is much economies of scale because they don't manufacture themselves. 

A2M went for a run today on the back of no negative readthru from BAL's update. I think people are nuts to price A2M at current levels, given what we've seen in BAL and BKL.... on how quickly and unexpectedly demand and rules can change in this Chinese consumer game. Where's the margin of safety?



JTLP said:


> Won't there be some overhang of a class action on this?




Probably some impact but it probably won't kill BAL.

May be BAL can simply use the inventory to settle the class action claimants once and for all. Solves 2 big problems with one stone.


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## galumay (11 January 2017)

skc said:


> May be BAL can simply use the inventory to settle the class action claimants once and for all. Solves 2 big problems with one stone.




GOLD!! That had me spraying my glass of fine red wine all over the screen!

going from the subime to the ridiculous, maybe they could do an equity for inventory swap with SGH and help them with their class action too!


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## Boggo (11 January 2017)

Didn't hear all of the interview but caught most of it on the drive back from Queensland.
Didn't catch who the commentator was that was being interviewed on the ABC, some investment advisor and he was using this company as an example of where people blindly follow company produced fundamental data that sound good but in reality the company has no supporting foundations and were at the mercy of foreign import rules.
He was very negative on some of what is being peddled as sound reporting as in this example where expectations were based on assumptions.


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## galumay (11 January 2017)

Boggo said:


> some investment advisor and he was using this company as an example of where people blindly follow company produced fundamental data that sound good but in reality the company has no supporting foundations




These advisors have 20/20 hindsight! Probably was one of the advisors pumping BAL when it was all the rage!


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## So_Cynical (11 January 2017)

So whos buying Bellamys tomorrow?


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## galumay (11 January 2017)

So_Cynical said:


> So whos buying Bellamys tomorrow?




Not touching them with my barge pole even!


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## Boggo (11 January 2017)

galumay said:


> These advisors have 20/20 hindsight! Probably was one of the advisors pumping BAL when it was all the rage!




Yes, I guess there are people who rely on others for their investment decisions and fall for that sort of selling.

He didn't sound like someone who had made a killing though


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## McLovin (11 January 2017)

skc said:


> Premium and niche is probably where they should aim. I think they can achieve margins much higher than 10% with a premium positioning. What they don't have is much economies of scale because they don't manufacture themselves.




I don't know. They've got no real competitive advantage that I can see, and the big multinationals like Danone/Unilever have the scale and distribution in to Asia. How premium can you get when every process of your product is controlled by external parties? It's not like they invest in genetics to create cows that produce better whey, and like you say they have no economies of scale in manufacturing. To me it just seems like a near commodity product and in the long run competition will erode margins.


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## McLovin (12 January 2017)

skc said:


> The deal with FSF is also interesting in that, there seems to plant a poison bill for any future change of control transactions. But is that really the case? If FSF terminates the contract on this provision, does it mean BAL is no longer up for the shortfall payment? IF so, doesn't it just give a 3rd party an incentive to buy a large stake in BAL in hope of triggering this clause? I am somewhat confused what FSF thinks it can achieve.




I was thinking more about this. Even more strange is that FSF too a second mortgage over BAL's assets as part of the contract extension. But if the contract can be terminated by someone lobbing in an offer what's the point of the lien? They won't get paid out if there's a takeover. I guess if they fail FSF gets $110m in milk formula?


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## Garpal Gumnut (12 January 2017)

As a chartist I have only ever seen such a loss in value, lead to extinction and tears.

Firstly in Dec.16 you have a fall in value of 50%. 

Then after a trading halt, in the last few days a further loss on huge volume. 

I doubt if the Vatican Bank still has a holding. Prayer only goes so far.

gg


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## Huskar (12 January 2017)

They say there is a direct correlation between number of babies in an annual report and performance over the following period. BAL certainly proves it - I understand that that is what they sell but every 2nd page has cute little eyes peering at you.
Call me contrarian but I am interested in this as a turnaround. McLovin you mentioned that this is a commodity product but I disagree - I have seen myself how important it is in China / Hong Kong / wider Asia to find quality products. And Australia (+ NZ) has done remarkably well in building a reputation for quality that will take a long time for Chinese producers to meet. Even European and American producers are seen more sceptically.
Looking at the balance sheet now for FY16 the leap in inventories (x3 cf with doubling of revenues) is a giveaway that product was not selling as fast as it should. Some sort of writedown or at least a shakeout looks likely in the short term. But that is not a company killer unless it is poorly handled...
We will see


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## skc (12 January 2017)

Garpal Gumnut said:


> As a chartist I have only ever seen such a loss in value, lead to extinction and tears.



Your chart's volume looks wrong. Volume should be 0 during the suspension.



Huskar said:


> Call me contrarian but I am interested in this as a turnaround. McLovin you mentioned that this is a commodity product but I disagree - I have seen myself how important it is in China / Hong Kong / wider Asia to find quality products. And Australia (+ NZ) has done remarkably well in building a reputation for quality that will take a long time for Chinese producers to meet. Even European and American producers are seen more sceptically.
> Looking at the balance sheet now for FY16 the leap in inventories (x3 cf with doubling of revenues) is a giveaway that product was not selling as fast as it should. Some sort of writedown or at least a shakeout looks likely in the short term. But that is not a company killer unless it is poorly handled...
> We will see




I also don't think infant formula has to be a commodity product. Being a parent myself... we make lots of decisions involving babies/kids based on brand and reputation. Sustained premium positioning is a viable strategy in infant formula... whether BAL can achieve that is the $B question.

Re: inventory at end of FY16... I think it was flagged by various commentators but the management response was that it was deliberate. Supply was tight and demand was going to keep surging... what a terrible mistake it would be if BAL can't sell all that customers wanted to buy. The $68m inventory is about 20% of the projected FY17 sales forecast ($340m I think)... which is not that different to prior periods. Also there may be some seasonality in inventories supplies that they decided to lock up early. So imo it was something worth monitoring and questioning but I wouldn't have concluded that sales growth had slowed.


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## McLovin (13 January 2017)

Huskar said:


> Call me contrarian but I am interested in this as a turnaround. McLovin you mentioned that this is a commodity product but I disagree - I have seen myself how important it is in China / Hong Kong / wider Asia to find quality products. And Australia (+ NZ) has done remarkably well in building a reputation for quality that will take a long time for Chinese producers to meet. Even European and American producers are seen more sceptically.




Hey Husk.

I did say "near commodity", I do think there is some differentiation, I just don't think it matters that much in the long run. I totally agree with you about Australia's food reputation in Asia, but BAL imports much of their milk from Europe, and many of their other ingredients are from other parts of the world. The only thing they guarantee on their website is that no ingredients come from China. Those ingredients are then turned into formula by a NZ company in Victoria. They're more an Australian marketing company than an Australian food company. They're big selling point is they're made in Australia and that they're organic. Organic is good, but A2M is now the biggest seller into China and it's not organic. So did Chinese buyers ever care about it being organic or just that it came from Australia?...This is what I mean about it being a near commodity. How hard would it be for me to replicate the BAL business? It's not super hard to source organic milk and toll manufacture it into infant formula. High margins incentivise competition. There is nothing I've seen, yet, that leads me to think the last couple of years are indicative of what they next ten will look like.


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## Garpal Gumnut (13 January 2017)

skc said:


> Your chart's volume looks wrong. Volume should be 0 during the suspension.
> 
> 
> 
> .




I apologise for that chart.

I've always been a believer that breast is best for babies, and I am quite sure my old mate Xi Jinpeng who I met in Fujian shortly after the millenium celebrations would agree.

Powdered milk is a risky product to export particularly to China where cleanliness is next to Maoism.

Nonetheless I abhor fundamental analysis but note that if ole Ji decided every Chinese mum tomorrow should breast feed, rather than bottle feed their infants, there would be a weeping and gnashing of teeth in the dairies and the holders of BAL.

I will attempt to post a better chart tonight, but it may be worth considering going to the pub today if the price shoots down through $4.00 on high volume and have a bottle.


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## Huskar (9 February 2017)

McLovin said:


> Hey Husk.
> 
> I did say "near commodity", I do think there is some differentiation, I just don't think it matters that much in the long run. I totally agree with you about Australia's food reputation in Asia, but BAL imports much of their milk from Europe, and many of their other ingredients are from other parts of the world. The only thing they guarantee on their website is that no ingredients come from China. Those ingredients are then turned into formula by a NZ company in Victoria. They're more an Australian marketing company than an Australian food company. They're big selling point is they're made in Australia and that they're organic. Organic is good, but A2M is now the biggest seller into China and it's not organic. So did Chinese buyers ever care about it being organic or just that it came from Australia?...This is what I mean about it being a near commodity. How hard would it be for me to replicate the BAL business? It's not super hard to source organic milk and toll manufacture it into infant formula. High margins incentivise competition. There is nothing I've seen, yet, that leads me to think the last couple of years are indicative of what they next ten will look like.




Agree with what you've said here, and when you talk about replacement value not being overly demanding that does get me worried as a longer term hold. I have not looked into it much further for now as investigating a few other names.

As an aside, the top and bottom 10 returning stocks of 2016 was an interesting list: http://www.thebull.com.au/premium/a/64825-top-10-and-bottom-10-stocks-for-2016.html.

And by comparison the best/worst of FY16: http://www.thebull.com.au/premium/a/61299-the-best-and-worst-performers-for-fy-2016.html.


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## notting (7 July 2017)

Didn't pay its bribes to the Chinese properly and not even this could get them back in ~

*Bellamy's Australia has put its shares in a trading halt *as it determines the impact of the *suspension of a key licence by Chinese authorities* overnight at its recently acquired Victorian cannery, Camperdown Powder. 

*Last month, it raised $60 million* to help fund the purchase of the cannery, which was supposed to deliver the company a key licence to allow its products to be sold into China, where regulations change in 2018.


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## Wysiwyg (29 March 2018)

BAL and A2M put-in take-out short sells after Nestle entering the Chinese market?


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## leyy (21 May 2018)

My buy order was triggered today for BAL, avg price $15.85 with an initial stop at $13.30 for both personal & SMSF accounts.

It has had a reasonable retracement of circa 30% from its all time high of $23 (March 2018), with reasonable support at $16

reason for purchases;

business is transforming and has good turnaround with lower cost base, very strong brand in china top two brands are (A2M + Bellamy's)

strong positive cash flow $59M 1H18 in last report, no debt

guidance upgraded in Feb 18

I feel that the stock decline was healthy and presented a good buying opportunity.

No real bad news over the last few months.

Although could be wrong, only time will tell.


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## MikesLM (10 July 2018)

https://www.thesun.co.uk/news/healt...by-milk-formula-new-babies-ill-parents-claim/

(also search BBC news via Google for another article on this matter)

There are current potential health and safety concerns in the UK over Danone's Aptamil infant formula product.  Parents have claimed their babies have become SICK over the new Aptamil formulation.  There appears to be concerns also over the quality of the new formulation (milk becomes clumpy and curdles).  Also, Danone has become stingy and reduced its Aptamil product size from 900g to 800g for the SAME price!

Questions to think about:
- Would this potential healthscare for Danone's Aptamil scare parents including Chinese parents importing Aptamil (e.g. via daigou) to not buy the product - at least in the short term - until or unless safety concerns are resolved?

- Would parents in China (and other markets) turn to more trusted Australian IF products such as Bellamy's organic infant formula (which is a direct competitor)?  Therefore, this would at least mean higher sales of Bellamy's IF at least in the short term such as 1H2019 (and build higher customer base for the long term).

- Can these UK Aptamil concerns spill over into other markets where Aptamil and Bellamy's are competing leading to more sales of Bellamy's product?

This concern might in part explain today's strong buying activity and rebound of Bellamy's shares.


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## leyy (13 August 2018)

Bellamy's is getting absolutely smashed, it has dropped close to 60% since its all time high in March this year.

There hasn't been any market announcements for the massive drop, There has been a few rumors and speculation that there may be delays for CFDA approval for their infant formula to sell in China which accounts for less than 10% of total revenue ($18M in sales).

I got stopped out at $13.50 with my recent entry.

I am watching this very closely as i think the market has overreacted with the potential CFDA delay.

I have placed some buy orders in the market waiting for this to turnaround and pop.


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## leyy (28 August 2018)

I have re-entered this week at $9.70 and there seems to be quite a bit of interest up 15% in the last two days. A2M and other similar providers have all reported well with strong growth and positive outlook, so I expect BAL to be in a similar position if not better.

BAL is reporting tomorrow so i guess the market is feeling positive in anticipation for a good result and an update on the CFDA approval.

If BAL can meet guidance, FY18 revenue growth to 30-35% and FY18 EBITDA margin to 20-23% (excluding Camperdown) the market should respond well.


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## leyy (29 August 2018)

BAL announcement this morning. Good results, guidance achieved, although the major concern is outlook is softer with moderate growth for FY19 with forecast of 10% revenue growth with EBITDA margins consistent at circa 23%, this is for Australian labels excluding china label pending SMRA approval.

No further updates on CFDA approval which is now known as SMRA. See figure 2. for details regarding the largest and most comprehensive restructure of the Chinese government. Bellamy's is confident in getting SMRA approval but respect and understand that this may be a complex and long process given the SMRA restructure.


Figure 1, Highlights







Figure 2, SMRA.


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## bigdog (1 November 2018)

12 month high $23.07 and low of $6.91

Close yesterday at $7.23 *Bellamy’s Australia Ltd* (ASX: BAL) share price has fallen more than 30% from its August 31 closing price of $10.96. 

The big falls have been subsequent to an October 24 trading update that warned of a weaker-than-expected start to financial year 2019. 

As such the stock’s falls may be well deserved and little to do with the wider macro-economic environment.


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## barney (1 November 2018)

bigdog said:


> 12 month high $23.07 and low of $6.91
> 
> Close yesterday at $7.23 *Bellamy’s Australia Ltd* (ASX: BAL) share price has fallen more than 30% from its August 31 closing price of $10.96.




Nice bounce off the lows today on good Volume … closed up 10% at $7.96


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## leyy (1 November 2018)

I'd say the falls are also due to the uncertainty with getting SAMR/CFDA registration in China with potential further delays.


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## satanoperca (1 November 2018)

bigdog said:


> View attachment 90087
> 
> 12 month high $23.07 and low of $6.91
> 
> ...






barney said:


> Nice bounce off the lows today on good Volume … closed up 10% at $7.96




I have not looked at this companies fundamentals or look at their chart, but I see there share price 2 ways :

1 Australian market, they are worth $7-9
2 Chinese market, yes there are some obstacles, but if they can bounce over them, share price x10 min of Australian $70, the high risk reward is can they penetrate and sustain delivery into the Chinese market which as well all know is massive.

Overall from this current price, it is a weighted gamble, if they cannot sustain market share and growth in China, they are not worth much than $7, if they can then, $23 looks very cheap.


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## bigdog (27 February 2019)

ASX Announcement this morning

























*Bellamy’s Chief Executive Officer Andrew Cohen and Chief Financial Officer Nigel Underwood will present the financial results via a webcast at 10:00am (AEDT) Thursday 27 February 2019. The webcast link will be live from 9:45am (AEDT). The link to the webcast is as follows:
*
https://webcast.openbriefing.com/4925/

Motley Fool reports
*Bellamy’s posts 26% decline in half year profits*
James Mickleboro | February 27, 2019
https://www.fool.com.au/2019/02/27/bellamys-posts-26-decline-in-half-year-profits/
The *Bellamy’s Australia Ltd* (ASX: BAL) share price will be on watch this morning following the release of its disappointing half year results.

For the six months ended December 31, on a normalised basis the infant formula company posted a 25.9% decline in revenue to $129.6 million, a 25.5% drop in EBITDA to $26 million, and a 26.3% decline in net profit after tax to $16.5 million.

On a statutory basis EBITDA came in 59.9% lower than the prior corresponding period at $14 million and net profit after tax was down 63.8% at $8.1 million. The statutory result includes a $12 million one-off inventory provision for all legacy-label inventory following its rebrand.

Management blamed the poor half on a decline in sales due to a number of factors including delayed SAMR registration, a planned reduction in trade inventory prior to the rebrand, and an observed slowdown in category performance.

* What’s next? *
Unfortunately, management has downgraded its full year guidance. At its annual general meeting it revealed that it expected full year Australian label revenue growth at the low end of its 0% to 10% range on FY 2018’s $302 million.

Whereas now it expects total revenue for the full year to be between $275 million and $300 million, including the Camperdown business which generated $1.9 million of revenue in the first half. This will be a year on year decline of 8.8% to 16.4%.

It has also downgraded its normalised group EBITDA margin guidance from between 22% and 25% to 18% and 22%. This reflects lower forecast revenue and increased investment in marketing and the China team over the coming period.

* How will the market react? *
Whilst this is clearly a very disappointing result, the market was largely expecting a significant decline in both revenue and profits.

According to a note out of Goldman Sachs, its analysts were expecting Bellamy’s to post a 29% decline in sales to $124.8 million and a 27% decline in EBITDA to $25.5 million. On a normalised basis the company’s result beat the broker’s estimates.

However, there’s a chance that the downgrade to its guidance could offset this and put its shares under pressure today.


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## bigdog (28 February 2019)

https://www.reuters.com/article/us-...n-infant-formula-maker-bellamys-idUSKCN1QG07N

*China delays, sales slowdown hit Australian infant formula maker Bellamy's*
Tom Westbrook

SYDNEY (Reuters) - Infant formula company Bellamy’s Australia Ltd on Wednesday said its half-year profit fell almost two thirds, hit by regulatory delays in China and falling domestic sales as it lost market share, sending its shares sharply lower

The former market darling has been waiting for 14 months for clearance to sell its products directly in its biggest growth market, and said the foregone sales would shrink annual revenue and margins would be squeezed as marketing costs rose.

The delay, for which the firm has no clear explanation, underscores the regulatory challenges of doing business in China and has left Bellamy’s to rely almost entirely on sales via notoriously fickle Chinese shoppers in Australia.

“I don’t think the model has blown up, but the question will be: ‘Can they get the traction back?’” said Mathan Somasundaram, market portfolio strategist at stockbroker Blue Ocean Equity.

Bellamy’s shares dropped as much as 10 percent to a six-week low in early trade, before recovering to trade about 2 percent below Tuesday’s close by mid-session, while the broader market rose 0.3 percent.

The company’s flagging sales come amid a broader consumer slowdown in China which has affected firms ranging from U.S. tech behemoth Apple Inc to Australian vitamin maker Blackmores Ltd.

Bellamy’s said its net profit fell 63.7 percent to A$8.1 million ($5.8 million) in the six months ended Dec. 31.

Sales also dropped by a quarter to A$129.6 million as customers swapped to New Zealand rival a2 Milk Company Ltd, which posted a record half-year profit.

Bellamy’s Chief Executive Officer Andrew Cohen gave no firm date for finally securing permission to stock the company’s organic milk powders and formulas in shops in China, which he had previously hoped to secure by the end of 2018.

“We fully respect the process and we don’t want to take guesses about how that process is going to go on,” Cohen said.

The company was hopeful officials would audit its premises in Melbourne by the end of the year as part of the accreditation, he added.

The company said it expected full-year revenue of between A$200 million and A$300 million, compared with A$329 million in 2018.

It expected an earnings margin of between 18 percent and 22 percent, compared with a previous forecast of 22 percent to 25 percent as a rebranding effort lifts marketing costs.


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## greggles (6 March 2019)

Bellamy's Australia recovering nicely during March, up from around $8.20 to $10.48, where it is currently trading. 

1H19 financial results released on 28 February were impacted by no Chinese-label formula sales due to SAMR Registration Delay, the reduction of $10M of excess trade inventory prior to rebrand, and increased local Chinese supply from competitors.

However, it appears that there is more confidence in BAL moving forward and the second half of FY 2019 looks far more promising.


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## bigdog (15 March 2019)

Motley Fool reports
https://www.fool.com.au/2019/03/15/the-bellamys-share-price-is-up-42-in-march/

*The Bellamy’s share price is up 42% in March*
James Mickleboro | March 15, 2019

The *Bellamy’s Australia Ltd* (ASX: BAL) share price is having another sensational day on the market.

In early afternoon trade the organic infant formula and baby food company’s shares are up almost 8% to $11.59.

This gain means the Bellamy’s share price has rocketed a massive 42% since the start of the month.

*Why is the Bellamy’s share price surging higher again?*
With no news out of the company, today’s gain is a bit of a mystery. But there are a number of potential catalysts that could be behind the move.

One is a reduction in the company’s short interest level. Short sellers have successfully targeted Bellamy’s over the last 12 months but appear to be moving onto new opportunities now.

ASIC’s latest short position report shows that Bellamy’s short interest had fallen to 9.3% as of March 8. That was down from 10.3% a day earlier and its lowest level since January. When short sellers close positions they need to buy shares to do so, which could explain the increased demand on the buy side.

Another potential catalyst could be speculation that the company is on the brink of receiving its SAMR accreditation which will allow the company to sell its Chinese-labelled products on mainland China.

Bellamy’s has been waiting for SAMR accreditation since the end of 2017, meaning it has been unable to benefit fully from the growing demand for infant formula in the country like rival *A2 Milk Company Ltd* (ASX: A2M).

The reason investors appear to believe that it could be granted soon is likely to be down to the company launching its high impact campaign in China this month. This campaign will be supported by A-grade ambassadors and key opinion leaders including Stefanie Sun, Zilin Zhang, and Niangao Mama. These three ambassadors have a combined following of over 55 million on Chinese social media platforms.


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## greggles (16 April 2019)

Bellamy's Australia share price down significantly during April on recent analyst downgrades and delay in the approval of Bellamy's SAMR application, which will enable it to sell its products in mainland China.

A little disappointing considering that A2M has been experiencing a bullish share price this month, particularly in the last few trading sessions.

However, it looks like BAL may be bottoming out around $9.30.


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## MARKETWINNER (20 April 2019)

Is the Bellamy’s stock price in the buy zone?


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## bigdog (23 April 2019)

Bellamy’s had a modest earnings period, but its strategic changes stabilised investor returns.

Rebranding plans and changes to its infant formula are expected to win over Chinese consumers.

However, Bellamy’s is still struggling to secure its SAMR accreditation which hinders it from being able to compete with A2 Milk through Diagou channels.

My share for May Tipping Comp and also included in 2019 year comp

Fingers crossed!!


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## greggles (24 April 2019)

Bellamy’s Australia has finished the day 15.6% higher at $11.12 after receiving SAMR approval for its new Bellamy's-ViPlus series which the company said will target the premium segment of the offline channel and initially focus on Tier 3 and 4 cities in China.


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## So_Cynical (28 June 2019)

If you like BAL its cheap, right on the long term bottom trend line.
~


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## Miner (11 July 2019)

So_Cynical said:


> If you like BAL its cheap, right on the long term bottom trend line.
> ~
> View attachment 95783



On 28th June BAL was $8.3, on 10 July it was $8.6. More interestingly see the volume rose by 30%.
Lets see what is going on here.


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## barney (11 July 2019)

Miner said:


> Lets see what is going on here.




Just snooping around here ….

I don't buy many Stocks over 10 cents so this one is not on my watch … however, if you hold it Miner, I think it is starting to look like a tidy recovery from the recent down trend. good luck with it.


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## Miner (11 July 2019)

barney said:


> Just snooping around here ….
> 
> I don't buy many Stocks over 10 cents so this one is not on my watch … however, if you hold it Miner, I think it is starting to look like a tidy recovery from the recent down trend. good luck with it.
> 
> View attachment 96092



Fantastic chart and signals including today's uptrend . Many thanks @barney and @So_Cynical


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## bigdog (16 September 2019)

*ASX announcement today
*
16/09/2019 8:03:56 AM 65    *Bellamy's enters Scheme Implementation with Mengniu*





249


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## barney (16 September 2019)

Last 12 months have been a bit of a roller coaster.  Given they traded as high as $23  eighteen months ago I guess todays $13.25 takeover price could be seen as bitter sweet for some longer term holders.


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## bigdog (15 November 2019)

ASX announcement by Bellamy today

15/11/2019 9:03:10 AM * Scheme receives FIRB approval
*
Today after the Foreign Investment Review Board approved its takeover of the China Mengniu Dairy Company Limited (Mengniu).

The September 16 takeover bid is worth $13.25 per share being a $12.65 per share cash offer plus a 60 cents per share fully franked special dividend to be paid prior to the scheme’s implementation
*









*
812


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## System (30 December 2019)

On December 24th, 2019, Bellamy's Australia Limited (BAL) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between BAL and its shareholders in connection with the acquisition of all the issued capital in BAL by a wholly-owned subsidiary of China Mengniu Dairy Company Limited, being Wise Journey Pty Ltd.


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