Bellamy's Australia Ltd (ASX: BAL) shares entered a trading halt on Monday morning ahead of a crucial announcement to the market.
Shares of the infant formula maker came under heavy selling pressure in the past fortnight after it revealed its Chinese sales expectations would not be met.
As can be seen in the chart above, Bellamy's shares sunk heavily when the market realised its growth expectations would be severely cut short. Specifically, the company said that a significant amount of supply was hitting the Chinese infant formula market ahead of tough new regulations being imposed. While Bellamy's said it expects to meet those new regulatory standards, pricing pressures would lead to lower demand and narrower profit margins.
Given the reason behind this morning's trading halt is due to "the release of an updated announcement of the impact of trading conditions on the Company's expected financial results" — investors are likely bracing for the worst.
The company's announcement is expected to be made, and the trading halt lifted, by no later than the start of trading on Wednesday December 14.
