The Infant formula sector on the ASX struggled for much of 2019 with increased competition and the threat of new regulations, but December was a positive month.

Six stocks notched gains, including Bellamys (ASX:BAL) which was acquired by Mengniu during the month.

But the top gainer was the newest stock on the block, Nuchev (ASX:NUC) — which sits 39 per cent higher than when it first listed.

Nuchev specialises in Goat’s milk which contains more vitamins than cow’s milk including 46 per cent more vitamin C. Medical experts claim that it is easier for babies’ to digest.

Nuchev says the goat milk infant formula market in China will grow 18.8 per cent from 2018 to 2023. It is expected to account for nearly 13 per cent of the total infant formula market.

However local firms are seeking to enter the market too, one being China’s largest dairy maker Yili. Last month Yili launched its first goat milk infant formula.

Vice president Zhao Xin said Yili’s goat infant formula had good growth prospects and that it would help revive the domestic sector.

Even with reports that China would seek to subsidise local companies at the expense of foreign entrants, locals have not forgotten the 2008 tainted milk scandal.

This crisis killed four children and hospitalised 54,000 more – reportedly affecting some children to this very day. But Xin believes this fear can finally be overcome with a product intrinsically healthier and safer.

 

Other winners

Also having a solid December was AuMake (ASX:AU8), which is a daigou-focused retailer that sells infant formula among other goods. The main catalyst was a strong trading update in the December quarter where it reported its best financial performance since listing.

Beston Global Food Corporation (ASX:BFC) and Jatenergy (ASX:JAT) also recorded solid gains in December, although much of the focus on the latter is because of its venture into plant-based meat.

On a 12-month basis the best performer is Bubs Australia (ASX:BUB), although it is well off its all time highs.

It finished the year raising over $35m and is looking to explore other Asian markets such as Vietnam.

Code Name Price (I) 1 Year % Return 1 Month % Return Market Cap
NUC NUCHEV LTD 3.59 39 39 $167.4M
AU8 AUMAKE INTERNATIONAL LTD 0.13 -47 30 $41.6M
BFC BESTON GLOBAL FOOD CO LTD 0.098 -32 21 $41.2M
JAT JATENERGY LTD 0.052 -23 6 $45.1M
AHF AUSTRALIAN DAIRY NUTRITIONAL 0.1 -20 2 $39.0M
BAL BELLAMY'S AUSTRALIA LTD 13.23 84 0 $1.5B
HRL HRL HOLDINGS LTD 0.11 22 0 $59.2M
LON LONGTABLE GROUP LTD 0.16 -55 0 $34.2M
KTD KEYTONE DAIRY CORP LTD 0.39 1 -1 $82.8M
SM1 SYNLAIT MILK LTD 8.7 0 -3 $1.6B
A2M A2 MILK CO LTD 14.04 40 -3 $10.3B
BUB BUBS AUSTRALIA LTD 0.975 106 -4 $546.3M
CLV CLOVER CORP LTD 2.66 99 -4 $436.0M
BXN BIOXYNE LTD 0.014 -58 -7 $9.0M
WHA WATTLE HEALTH AUSTRALIA LTD 0.4722 -42 0 $98.2M

Read More: Goat milk supplier Nuchev quenches investors’ thirst on ASX debut with 23pc gain