Australia's Blackmores: Citi says capital raise 'sensible', pushes for expansion beyond China

Health and Happiness (H&H) International Holdings

27/05/2020 23:47

** Citi Research raises price target on vitamin maker
Blackmores  BKL.AX  to A$79.80 from A$72.80; maintains "neutral"
rating
    ** Brokerage deems Blackmores' A$117 mln ($77.40 mln)
capital raising a "sensible" move but would have preferred a
larger raising to further reduce gearing and expand outside
China  urn:newsml:reuters.com:*:nFWN2D80UK
    ** BKL on Wednesday earmarked some proceeds to accelerate
investment in Asia and strengthen its balance sheet, while China
remained a key focus
    ** While Blackmores said it planned a measured entry into
India by FY21, Citi notes competitor Swisse, unit of Hong
Kong-listed Health and Happiness International  1112.HK , gained
first-mover advantage by launching in India in Feb
    ** "While we view the Indian opportunity as potentially
significant longer term, it is unlikely to move the dial in the
short term" - Citi
    ** Pursuit of Chinese distribution partner broadly positive
but may not be material to BKL's China business - Citi
    ** One of 10 analysts rate the stock "buy", five "hold" and
four "sell" or lower; their median PT is A$72.8 – Refinitiv data
    ** As of last close, stock had fallen 7.02% this year

($1 = 1.5117 Australian dollars)

 (Reporting by Arpit Nayak in Bengaluru)
 ((Arpit.Nayak@thomsonreuters.com; +91  80 6182 3472;))