Crowning glory: Former Miss World Zilin Zhang will help Bellamy’s market its products in her home country of China as the company prepares for resumption of trading there. Picture: AFP

DAIRY

Bellamy’s Organic (ASX: BAL) gets China shares lift

PETER HEMPHILL, The Weekly Times

March 6, 2019 12:00am

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SHARES in organic infant formula manufacturer Bellamy’s Organic have soared 21 per cent in two days, despite the company announcing a substantial decline in first half revenue for 2018-19.

Bellamy’s share price rose from $8.15 to close at $8.83 on Friday after it announced the previous day its revenue for the six months to December 31, 2018, had fallen to $129.6 million, compared to $174.9 million for the previous corresponding period.

The share price rose a further 12 per cent on Monday to close at $9.89, taking the two-day gain to $1.74.

Bellamy’s Organic said it was gearing up for the eventual resumption in trade to China by doubling its marketing spend and doubling its sales staff in the Asian country.

It has engaged Chinese celebrity singer Stephanie Sun, who has 24 million Weibo followers, to help market its products, along with former Miss World Zilin Zhang, who has 16 million Weibo followers.

The lower revenue has been attributed to delays in getting export licences for China, a rundown in trade inventory and a general slowdown in infant formula sales.

Direct sales of infant formula into China by manufacturers around the world have been hampered by licensing issues last year. Bellamy’s Camperdown Dairy packing plant did not get an manufacturing export licence until January this year.

Like all other infant formula manufacturing companies around the world, Bellamy’s is still waiting for a marketing licence so it can sell Chinese-labelled product in retail stores in China.

Bellamy’s chief executive officer Andrew Cohen said the company was looking to “long-term growth and higher levels of investment in China”.

Another company aiming for organic infant formula sales in China, Wattle Health Australia, also recorded a slowdown, with revenue for the six months to December 31 last year at $363,000, a fall of 42 per cent on the previous corresponding period.

Managing director Lazarus Karasavvidis attributed the fall to switching from conventional milk to organic milk in its products.