Blackmores Limited (ASX: BKL) was sold down in February after reporting a profit that disappointed the market, despite being up 20% for 1H18. 3Q18 results were similar, and the company said China sales were disappointing but indicated 4Q18 would be stronger. A shareholder briefing last week highlighting China as the single most important overseas market for the company led to a bounce in the shares. The Chinese business is worth about $250 million with the expectation of strong growth going forward.
The ABC (Australian Brands in China index) 2018 produced by Monash University and marketing company Digital Crew monitors the “health” of Australian brands in China. Health and baby formula brands were among the lowest ranking in the list due to supply problems and limited availability of stock.
The shares are trading on a hefty forward price-earnings (PE) of 35x, which is well above the Household & Personal Products industry median PE of 14.95x.
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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.