The Bellamy's Australia Ltd (ASX: BAL) share price rose 7% to $8.45 after the company announced that a Chinese suspension of its Camperdown facility export license had been lifted.
Following a trading halt and month-long suspension of the license, Bellamy's responded to the Chinese certification body (CNCA) concerns, and today the suspension of the Camperdown facility was lifted.
The suspension was not material in the near term as Bellamy's had not planned to start canning its products at Camperdown until the second half of 2018, following various improvements that were planned for the facility.
Still, investors were worried that the company (which only recently acquired Camperdown) had bought a lemon, but those fears were allayed today. Shareholders will be hoping this is the last of Bellamy's regulatory issues and trading halts for a while, as the company has seen numerous disruptions to its shares over the past 12 months or so. We'll have full coverage of Bellamy's results when it reports on the 25th of August.
For now, many companies in the baby formula sector including Bellamy's, a2 Milk Company Ltd (ASX: A2M) and Wattle Health Australia Ltd (ASX: WHA) are currently trading on frothy valuations, and investors should be sure to do their research on a company's growth prospects and competitive position before piling in.
