New China regs send consumer goods shares like Bellamy’s Australia Ltd rocketing

The share prices of some of the ASX’s most popular consumer goods companies that sell products into China via online channels are rocketing today on the back of some reported changes to the official Chinese “cross border e-commerce channel (CBEC)”.

According to news reports in The Australian newspaper China has announced a “new regulation” will come into effect from January that means goods sold via CBEC “would not require compliance with China’s domestic regulations”.

This is considered good news as many in the market were concerned that companies like Bellamy’s Australia Ltd (ASX: BAL) may end up in a regulatory no man’s land by 2019 unless they received updated licences or new approval for routes such as CBEC to sell their goods in China.

Today, Bellamy’s shares have surged 5.3% to $7.59, shares in the A2 Milk Company Ltd (ASX: A2M) are up 6.6% to $9.97, shares in Treasury Wine Estates Ltd (ASX: TWE) are up 5.7% to $14.29, and Blackmores Limited (ASX: BKL) shares are up 6.6% to $134.27.

In an additional bonus for investors in the vitamins manufacturer The Australian newspaper is also reporting that analysts at Macquarie Group Ltd (ASX: MQG) have put an “outperform” rating and “$150 share price target” on Blackmores shares.

The positive rating is unsurprisingly based on Blackmores’ sales potential in China, with the group already delivering very strong growth in this giant market.

The Macquarie analysts also noted that they expect the Chinese government to be supportive of “growth in cross border e-commerce trade” in another positive signal for investors in stocks linked to demand from the rising Chinese middle class.

Cross border e-commerce trade is important to all of the ASX-listed foodstuffs businesses as local Chinese shoppers in Australia (know as daigou) commonly buy goods in wholesale quantities to sell on in China for a mark-up via popular e-commerce sites such as Alibaba’s Tmall. The companies also sell their products directly on these popular consumer-shopping websites.

Souce: November 22, 2018.

Investors then should keep a close eye on the changing regulatory environment as it remains very important to all of these businesses.

JUST RELEASED: Our Top 3 Dividend Bets for 2019

NEW! The Motley Fool’s team of crack analysts has just released a timely report revealing the names and codes of their top 3 dividend share recommendations for 2019. Be among the first investors to get access—FREE, for a strictly limited time. You’ll discover the names of 3 hefty dividend paying companies with what our analysts consider to be solid growth prospects for the year ahead…

The first two offer fat, fully franked yields and the third is a surprising REIT offering you the chance to become a landlord with none of the hassle! If you’re looking for hot new ideas, look no further. But you do need to hurry. Snap up your free copy now, before supplies run out!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our top 3 dividend share recommendations right away.

Motley Fool contributor Yulia Mosaleva owns shares in Macquarie Group Ltd. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.