3 Most Discussed Stocks In Infant Formula Space – A2M, BAL And...

3 Most Discussed Stocks In Infant Formula Space – A2M, BAL And WHA
By
Team Kalkine
-
February 21, 2019


Many Australian infant formula companies export their products globally and in the last few years, the market demand for infant formula has significantly increased in the international market, particularly in China. Because of this, many investors are keeping an eye on stocks that belong to infant formula space. Let’s take a closer look at three most discussed stocks in infant formula space:

A2 Milk Company Limited (ASX: A2M)

A2 Milk Company Limited (ASX: A2M) recently released its half-year results for FY 2019. For the half-year period, the company has reported revenue of $613 million, which is 41% higher than the previous corresponding period (pcp). The company has also reported an EBITDA of $218 million which is 53% higher than pcp. The Sales of the company’s infant formula totalled at $495.5 million which is 45.3% higher than pcp, driven by share gains in China and Australia.


The Company also saw pleasing growth in its liquid milk business of 20.2% to $83.4m, particularly in its key markets of Australia and the US. The company’s sales of other nutritional products increased by 40.4% to $34.3 million, driven predominantly by milk powders and supported by new products launched towards the end of FY18.

In the past one year, the share price of the company increased by 56.60 percent as on 20 February 2019. A2M’s shares last traded at $14.100 with a market capitalization of circa $10 billion as on 21 February 2019.

Ballamy’s Australia Limited (ASX: BAL)

Ballamy’s Australia Limited (ASX: BAL) is involved in creating high quality, nutritionally balanced and organic baby food and formula with all of its products being dual certified by two Australian certification bodies, ACO and NASAA. Currently, the company owns 90 per cent beneficial interest in Camperdown Powder Pty Limited. Recently in January 2019, Camperdown’s blending and canning line at Braeside received a licence extension from the General Administration of Customs China to 31 December 2019 which will allow Camperdown to continue the production of SAMR approved infant formula for export to China. In January, the company released Ballamy’s Organic Investor Presentation, in which it reported the Group’s revenue of $329 million for the second half of FY18 which is 37% higher than the previous corresponding period (pcp). Further, the company reported Normalised group EBITDA of $71 million which is 65% higher than pcp.

In the past one year, the share price of the company has decreased by 42.90 percent as on 20 February 2019. However, the stock has offered decent YTD return of 8.04 % till date. BAL’s shares last traded at $8.130 (-0.854% intraday) with a market capitalization of circa $929.62 million as on 21 February 2019.

Wattle Health Australia Limited (ASX: WHA)

Wattle Health Australia Limited (ASX: WHA) provides high quality, 100 percent Australian made health and wellness products to its customers. Recently on 11 February 2019, the company entered into a Purchase Agreement with a wholly owned subsidiary of Mason Holdings Limited to purchase an additional 46% of Blend & Pack (B&P), for $46 million plus undistributed earnings, taking its total holdings in B&P to 51%. B&P is the leading independent nutritional dairy processing company which manufactures dried dairy products for major domestic and international nutritional dairy companies. After the acquisition of B&P, WHA group is expected to reportedly have total assets around $165 million.

In the past one year, the share price of WHA decreased by 61.40 percent as on 20 February 2019. WHA’s shares last traded at $0.885 with a market capitalization of circa $174.08 million as on 21 February 2019.