Okay, time to put my cards on the table. The signals appear to...

Okay, time to put my cards on the table.

The signals appear to be fairly bearish. The longer you wait, the cheaper the price you can pick up WHA at (probably). The trick however is to not wait so long, that CFDA is accredited while you are still on the sidelines holding NOTHING.

I think there are ALOT of people currently doing this. Eyeing that tasty share price as it drops but also trying to get in before CFDA happens. I guess you could say that it is like playing a game of chicken in that regard.

In order to best avoid getting caught with my pants down. I decided to revisit the old announcements and read the wording carefully at an attempt to make an educated guess at when to jump back in right before CFDA.

Thursday 28 September 2017:
WHA has commenced the process to obtain CFDA approval, and have been advised that formal
approval will be announced in November 2017, subject to satisfactory compliance.

Monday 20 November 2017:
Wattle Health Australia Limited (“WHA”) is pleased to provide
an update on WHA’s China Food and Drug Administration (CFDA) accreditation.
WHA successfully lodged online and in hard copy format the application for WHA infant
formula range to obtain CFDA approval.

Therefore WHA submitted it's full dossier in November 2017.


We can somewhat reference this to a company that has applied for and received it in the past. This is none other than the market darling A2M.

May 2017
Synlait submitted the dossier application to the CFDA for the registration of The a2 Milk
Company’s infant formula
September 28 2017
SYNLAIT RECEIVES CFDA REGISTRATION OF
THE a2 MILK COMPANY’S INFANT FORMULA (28) September

How long did this take? May, June, July, August, September ... maybe 5 months?

This seems to line up with what WHA said at the 20th November AGM Commentary – “We expect to receive CFDA accreditation within the next 3 months, which makes us one of the first Australian companies to comply with the 2018 regulations”

Okay so WHA submitted its completed application in November 2017. The targeted date would be February/March 2018. Wouldn't that mean WHA is well overdue for their CFDA?

Well hold that thought. The targeted date had two problems. One is Chinese New Year which would result in minor delays (maybe half a month?). The other spanner in the works and larger glaring problem is that in March - the National People’s Congress approved the Institutional Reform Plan of the State Council. This plan merged a number of regulatory agencies – including CFDA into a new super entity which we know as SMRA – or the State Market Regulatory Administration.

In one of the WHA announcements, I have actually decided to ignore WHA's submission month of November altogether. The information is within the quarterly sales announcement made in April (After the SMRA reform). They read as follows:

Ann: Quarterly Sales
06/04/18
As announced on 5 April 2018, WHA has responded to final requests from the China Food and Drug
Administration (CFDA) with respect to WHA’s application for CFDA accreditation.

To me, this reads as the true submission date. As CFDA was effectively inoperative from Nov17 to Mar17. The transition to SMRA has caused all applicants to resubmit. THIS, I think this is where the 5 months begins when comparing to A2Ms timeline, NOT the Nov 2017 date.

April, May, June, July, August (late August?).

I might be grasping at straws analysing the wording of announcements here. And the added differences when comparing to A2M has it's problems. A2m applied and got approved through CFDA while WHA will have to go through SMRA. But I think this as least provides a decent ballpark estimate and different perspective.