Please be cautious, I know plenty of investors have made money with BAL, but that does not guarantee more money is to be made. China market is a volatile one, government regulations change rapidly and without much warning. Here are some facts:
1. There are plenty of Bellamy stock for our pharmacies, ordering restrictions have lifted to some extent, and stock arriving weekly, we have now stopped ordering.
2. The market is flooded, with chemist warehouse selling Stage 3 online at $24.99, 6 months ago, it was fetching over $30 per can.
3. As an Australian company, and new Chinese government regulations require proper export certification in order for it to enter the market, plus Chinese labelling changes. Majority of stock which moved via the 'Grey market' will now experience difficulty. MGV's Devondale branded milk powders is a prime example of this. Aptamil and A2 is unaffected as their parent company is in NZ.
4. The new taxation laws on cross border eCommerce will also see a temporary slow in sales to account for price adjustments and consumer acceptance of the new pricing.
5. Bellamy formulas are now for sale in Sydney Asian warehouses for below cost as export operations are covering losses.
I have traded BAL several times, it has been a great company and it may yet grow stronger but the risks are now evident. No good thing will last forever especially when it's connected with China, an economy with a boom or bust mentality, I'm afraid that infant formula is just another commodity caught up in its whirlwind.
