MENU

Why Ansell sales could be about to skyrocket

Chinese growth has been the saving grace for many Aussie companies during a period when global economies have struggled. Resource companies like BHP Billiton (ASX: BHP) would surely be a shadow of the goliaths they are today without the substantial growth driven by China.

Now personal health device manufacturer Ansell Limited (ASX: ANN) could be about to benefit massively with a new social focus on sexual health education in China.

Sales in products of the company’s Sexual Wellness division could surge as a result of new public education programs in schools and universities through China that are focusing on sexual wellbeing. One forecast cited by Bloomberg from researchers Global Industry Analysts Inc. forecasts the growth in condom sales in China to increase by 9% annually over the next five years when the market will become a billion dollar industry.

In 2006 Ansell acquired China based company Wuhan Jissbon Sanitary Products Co., currently the second largest condom manufacturer in China. The company sells a brand called Jissbon, which according to Bloomberg sounds like “James Bond” in Chinese.

Ansell’s Sexual Wellness division accounted for 18% of total revenue in the first half of financial year 2013 with sales of branded condoms growing by 7%. China’s new sex education programs, delicately called “companion education” classes are free marketing to the country’s growing middle-class population and it is becoming increasingly common for universities in China to make free condom dispensing machines available to students.

The Chinese market holds significant potential for medical device manufactures if they can gain acceptance and can protect their product quality, particularly with an increasingly wealthy population. Healthcare companies like hearing aid manufacturer Cochlear (ASX: COH) and respiratory device maker Resmed (ASX: RMD) will carefully be weighing up their options to grow into the market.

Foolish takeaway

Ansell acquired three new companies in the first half of 2013 including a Guangzhou distribution company. For the full-year 2013 the company anticipates earnings growth of mid-single to low double-digit levels. And with the solid growth forecasts for their high-end products in the Chinese market, the long term for Ansell could be very bright.

In the market for high-yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.