Bellamy's shares rocket 24% on news of China's regulatory approval

Is Bellamy's out of the woods in China?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Bellamy's Australia Ltd (ASX: BAL) share price is up 24% to $11.93 this lunchtime after the organic baby formula producer announced that last night the Chinese regulator, "SAMR released a series of approvals, three of which relate to the approval of a new Bellamy's branded formulation-series to be produced at the ViPlus Dairy (ViPlus) facility in Toora, Victoria."

However, Bellamy's also cautioned: "It is important to note that this is a separate application to Bellamy's existing SAMR application to produce its organic series at Camperdown Powder, which remains in progress."

So even though Bellamy's is yet to receive the key approval for products manufactured at its Camperdown factory this news seems to be a step in the right direction and auspicious for its chances of receiving the full approval needed to sell its products in the Chinese market.

As at April 16 Bellamy's had 11.7% of its outstanding shares sold short by speculators betting on the share price falling perhaps as they believe the company will produce bad news related to unpredictable Chinese sales and regulation.

For now though it looks like the opposite could be true to suggest short sellers are playing a high stakes game, with the potential for massive losses vis-a-vis today's 24% share price rise.

Elsewhere, another baby-formula business in a2 Milk Company Ltd (ASX: A2M) has received its required Chinese regulatory approval (notably its supplier Synlait Milk Company Ltd (ASX: SM1) is largely Chinese owned) and is printing new record highs again today.

Motley Fool contributor Tom Richardson owns shares of A2 Milk. You can find Tom on Twitter @tommyr345 The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Bellamy's Australia. 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.

More on Share Gainers

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a rough Friday to close the trading week today.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Pointsbet, Qantas, Serko, and Yandal shares are pushing higher today

These shares are avoiding the market selloff today. But why?

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best performing ASX 200 shares in October

Did you own the best performers on the index last month? Here they are.

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors copped another rough session this Thursday.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Mineral Resources share price rockets 16% on $1.1 billion news!

ASX 200 investors appear thrilled with Mineral Resources' latest news.

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing Wednesday session for ASX investors today...

Read more »

Hiker man backpacker with hands up in the summer mountains with cloudy sky.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors enjoyed anther positive session this Tuesday.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Firefly, Premier Investments, Serko, and Zip shares are roaring higher today

These shares are catching the eye with strong gains on Tuesday. But why are they rising?

Read more »