BAL price target $12, page-11

You are absolutely right. Babies dont drink more milk during January or February.

The sales season kicks off in November in China with the 11/11 singles day sales. Then there is the 12/12 sales in December.

January and February are peak holiday season period in China due to Chinese new year celebrations which can last for up to a week. Lots of employees take time off from work and travel back to their home towns to spend time with family. During this time people generally stock up on essential supplies.

BAL's main suppliers are Bega and Fonterra who are not directly competing with Bellamys because they don't have a popular brand for organic baby formula like Bellamys. If they take Bellamys out then the loss to their own share price will be multifold than the loss from commercial negotiations. One of the supplier or more might actually take a shareholding interest in BAL as a part of the deal if offered. There are always legal loopholes in any contract or agreement.

During the GFC, I was arm wrestled by one of the big four bank's legal team to pay a large amount of money to close a mortgage contract due to sale of property. I had a quite few sleepless nights and one night while re-reading the mortgage agreement. I managed to find a large legal loophole in the mortgage contract. Instead of paying off the bank, I negotiated a compensation from the bank for the stress caused. The compensation money was paid int my bank account on the settlement date as ex-gratia payment. That large legal loop hole has been subsequently fixed on thousands of their contracts due to my courtesy.

BAL has the option to do a capital raising or raise debt to ward off any possible cash flow issues. There are no grounds for BAL going into voluntary administration as this stage. I have a knack for selling out of companies in time albeit at a loss. I will do the same with BAL if those signals emerge. I will keep you posted.