How does a 16% gain in less than 24 hours sound?
And no…I’m not talking about a small-cap punt…
This is exactly what investors of Bellamy’s Australia limited [ASX: BAL] enjoyed this week.
Why did BAL move so quickly?
Read on and you’ll find out…
First things first…
If you didn’t know, Bellamy’s is a supplier of organic food and infant formula products.
From a financial stance, Bellamy’s has $95 million in cash, and holds an enviable $0 in debt. What’s more, it’s willing to spend some of that money to increase its market share.
This is exactly what BAL indicated during its last investor update, issued on Wednesday, 27 February. You can read it yourself here if you want. But there were three main points that stood out:
- BAL will be doubling its marketing budget.
- BAL will also be doubling its Chinese sales team.
- BAL plans to promote its brand in China by hiring Singaporean singer Stefanie Sun.
Sun has over 24 million followers on Weibo (the Chinese Facebook) and BAL intends on using her influence to grow its market share throughout China.
To top this off, Bellamy’s is currently ranked as the number one organic brand in Australia, and the number two organic infant brand globally.
What sent the share price soaring 16% on Wednesday?
Well…Bellamy’s released another ASX update.
And it was a huge win.
In short, the company received approval from China’s State Administration for Market Regulation (SAMR) for three of its key products.
Bellamy’s has been waiting a long time for this approval in order to launch its new formulation series. The products will be produced right here in Victoria.
The SAMR certificate is part of BAL’s strategic plan to target China’s growing middle class.
This latest update showed investors those plans are going ahead.
As a result, Bellamy’s shares shot up 24.5% during the day, though finished up at a more modest 15.59%.