Many investors will be well aware of the significant tailwind of Chinese demand for Australian manufactured food and beverage products being experienced by a handful of ASX-listed companies.
Amongst the winners which have enjoyed big re-ratings in their share prices have been wine producer Treasury Wine Estates Ltd (ASX: TWE), baby formula marketer Bellamy's Australia Ltd (ASX: BAL) and vitamins company Blackmores Limited (ASX: BLK).
The above three stocks have experienced major share price gains in the past year and while their outlooks remain bright, understandably investors may be wary of buying at these levels.
Given the long-term tailwind of Chinese demand however, it arguably makes sense to look for other companies that could also benefit from the same forces, but which haven't as yet captured the market's attention.
Agricultural Stocks under the radar?
A recent report by the Australian Bureau of Statistics (ABS) noted that the value of Australian farm production had risen to $54 billion, an increase of 5.4% despite poor seasonal conditions across much of the country.
The ABS noted that the major driver of the increase was "strong international demand for livestock and meat products."
With a cultural change reportedly occurring in China that has led to increased consumption of red meat, there are a few specific stocks which could be well placed to benefit.
Australian Agricultural Company Ltd (ASX: AAC) is a leading owner and operator of cattle farming and beef production facilities. With a newly established abattoir in Darwin, AACo is strategically positioned to export into Asia.
Meanwhile, rural services business Elders Ltd (ASX: ELD) and feed supplier Ridley Corporation Ltd (ASX: RIC) are both important contributors to the supply chain for beef production and marketing.
With the shares of these three companies arguably more reasonably priced, this could be a good space to search for stocks with upside potential from China's growth.
