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Bellamys shares plunge by 44 per cent as the baby formula producer flags weaker sales in china

ORGANIC baby formula maker Bellamy’s share price has plummeted after the company reported weaker sales in China.

As much as 43.9 per cent was wiped from the shares this morning after Bellamys released an investor update flagging softer revenue this year.

Sales on November 11s Singles Day Chinas biggest online shopping event failed to meet expectations, as have sales in China since then, the company said.

We more than doubled revenue growth on Singles Day across all e-commerce platforms compared to last year, chief executive Laura McBain said in a statement. The growth however fell short of our expectations.

Bellamys blamed a regulatory crackdown by the Chinese government, which had triggered discounting by a rival company that were selling off stock in anticipation of losing their export licenses, temporarily eating into its sales.

Chinese authorities tightened regulations of baby formula imports in October, in a bid to increase safety standards and minimise the risk of contamination.

Just nine importers will be accredited under the new system, which will give local brands a stronger position in the market.

The Tasmanian-based company has been a market darling, with its share price rising more than tenfold from $1.60 to a peak of more than $15 last year as it capitalised on the booming Chinese appetite for the clean and green product.

Worth $165 million at the end of 2014, it reached a share market capitalisation of $1.2 billion in the middle of 2016.

But, while the company seemed to be scaling heights, its chairman Robert Woolley and Ms McBain were quietly selling off hundreds of thousands of shares, fuelling scepticism in some corners.

Some analysts questioned the assumption that Chinese demand for Australian-made baby formula would continue at the same levels, while others critiqued the companys mastery of its supply chain.

We believe Bellamys is a well-run company affected by a demand spill-over from China following several food scandals, which has distorted demand for infant milk formula within Australia, Lloyd Moffatt of Religare Institutional Research told Fairfax Media.

We thus believe that the companys revenue growth rate is unlikely to sustain, going forward.

Other baby formula producers were affected by the Bellamys announcement, with Blackmores down nearly 6 per cent this morning, while Bega Cheese and A2 Milk fell 13 per cent.

Bellamys revenue for the first half of the 2016/17 year is expected to be about $120 million and the company said revenue in the second half of the year would be similar if current conditions continue. That forecast would fall short of the previous years annual revenue of $244.6 million.

Bellamys shares were down $4.49, or 37 per cent, at $7.64 at midday (AEDT) on Friday, with more than 12 million shares traded.

With AAP

The ASX 200 finished down 1.0% on Friday to slip 1.1% over the week. Bellamy's Australia (BAL) shares dropped 43.5% after warning of weaker-than-expected sales of its infant formula in China.

Boxing day sales shoppers hit the stores to grab a bargain

AUSTRALIANS spent an estimated $200 million online yesterday as they got the jump on shoppers who braved the Boxing Day crowds.

Australian Retailers Association executive director Russell Zimmerman said online sales would make up seven per cent or more of the estimated $2.3 billion spent nationally in the Boxing Day sales.

I think that figure will probably push up a little bit today beyond what the 7 per cent is, Mr Zimmerman said.

The seven per cent figure is in line with the $200 million Cashrewards estimated online shoppers would spend this year, up from $125 million last year.

Mr Zimmerman said major retailers told him there had been a steady stream of customers shopping online since Christmas Eve, with many opting for click and collect to get their purchases as soon as possible. said Australians spent about $1.67 million every minute of Boxing Day.

Research from showed that last year more than 50 per cent of shoppers logged on between the hours of 6am and 1pm on Boxing Day to grab the best bargains online and nearly one fifth of people checked out the online savings before 2am on Boxing Day.

Mr Zimmerman said the trend in the past few years was for retailers to start offering their post-Christmas discounts early online in the lead up to Christmas.

Some of them are probably only matching what they were doing in store in many cases, he said

Myer and David Jones launched online discounts on Saturday while Kogan launched its post-Christmas discounts five days before Boxing Day.

Department stores Myer and David Jones opened their doors to the public at 5am on Boxing Day, and mad shoppers were greeted at David Jones by swimsuit model Jessica Gomes who hosted the final countdown.

Oakleigh resident Alex Poon, 18, was first in line at Myer and had been waiting since 10pm last night.

He mostly used social media and chatted to other shoppers to pass the seven-hour wait.

I got in at 10pm, and just thought I would come down with a few friends, Mr Poon said.

I hope to get a few clothes bargains.

Michael Le was one of the lucky few who won the golden ticket to Myer, allowing him to enter the store 15 minutes before anyone else.

He arrived in line at Myer at midnight.

I heard the event was happening so hoping to see how it all goes down, Mr Le said.

Mr Le said he has a gift in mind for someone special he was hoping to snap up the bargains, but remained tight-lipped on what he had his eye on.

Meanwhile, Amanda McNeill lined up at David Jones from 8pm.

I just love, love, love a bargain, Ms McNeill said.

Other hardcore fans who did not want to brave the hot weather and queues decided to stay in hotels in the CBD to be close to the action and to start shopping as early as possible.

Sisters Taylah Bean, 19, and Ellie, 9, rented a room in a city hotel after driving down from the Mornington Peninsula yesterday with mum, Karen Bean.

Were from the Mornington Peninsula, so we stayed in the CBD just for the sales, Ms Bean said.

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