Citibank remains upbeat on the growth prospects of Bellamy’s Australia Ltd (ASX: BAL) despite a short-term earnings hit, according to a report in The Australian.
Bellamy’s share price slid about 18% last week after a broker note out of Goldman Sachs slashed its price target off the back of CFDA accreditation issues that could impact Bellamy’s sales volumes in China.
But according to The Australian, Citibank believes “the long-term drivers of Chinese consumers preferring premium imported formula remain in place”.
According to The Sydney Morning Herald, the US yesterday opposed a World Health Assembly resolution to encourage breastfeeding – bringing the baby formula vs breastfeeding debate to the forefront of the minds of the Western world.
Other ASX companies such as A2 Milk Company Ltd (ASX: A2M), BUBS Australia Ltd (ASX: BUB), Jatenergy Ltd (ASX: JAT) and Wattle Health Australia Ltd (ASX: WHA) have their cards stacked on the continued global reliance of baby formula for infant nutrition, with A2 having done especially well in the Chinese market beside Bellamy’s.
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