Why Ansell sales could be about to skyrocket

Increased awareness on safe sex opens up Chinese market to condom maker.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »