This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Abbott, Nestle, Prepare to Profit from China’s Upcoming Baby Boom

BEIJING ( TheStreet) -- Everyone loves a baby, including investors looking to profit from the recent liberalization of China's one-child policy.

Companies that make infant formula, incubators and squeaky toys are getting extra attention from Chinese stock investors now that most of the country's provincial governments have agreed to let more couples have two children.

Because Chinese parents often prefer foreign-brand baby food, global nutrition specialists poised to benefit include Abbott Laboratories (ABT - Get Report), which this week announced a cooperative investment in China with the New Zealand dairy company Fonterra, and Nestle (NSRGY), which bought Pfizer's (PFE - Get Report) baby food business in 2012.

10 Best Cars for the Great American Road Trip

Amazon Hits the Skies: Tech Winners & Losers

Millions of babies are likely to be born over the next few years to mainland couples who, under the adjusted rules, are eligible for a second because either the mother or father has a parent who was an only child. Most will be born in major urban areas where China's consumer class is rising.

The near-term baby boom for couples between ages 25 and 34 could be as high as 11 million births, based on the current number of married adults in that age range, according to government research. Some experts speculate, however, that for financial reasons only about half of these couples may choose to have a second child.

Ultimately, regional government family planning agencies will control the demographic pace, as each second baby -- like all babies in China -- must be approved by government officials before birth is allowed. Authorities in recent years have been approving between 16 million and 18 million births annually under the 35-year-old, one-child policy, which has kept the birth rate at a relatively low 12 per 1,000 people since the late 1990s.

Provincial governments started gradually introducing the second-baby policy in January in line with central government orders issued last fall. As of early July, according to state media, 29 of 31 local governments had to some extent adjusted their rules. Previously, a second child was allowed only in some rural areas, while a few rural minority families could have more.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ABT $38.90 0.00%
PFE $32.71 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs