* Bellamy's H1 NPAT A$13.7 mln vs A$3.2 mln
* Shares down 14 pct
* China powdered milk imports down 40.7 pct in 2015 (Recasts, adds broker quote, share price movement)
By Byron Kaye
SYDNEY, Feb 19 (Reuters) - Shares in infant formula maker Bellamy's Australia Ltd BAL.AX fell the most ever on Friday as investors looked past a spike in first-half profit fuelled by Chinese demand and questioned the high valuations of domestic powdered milk exporters.
Shares in Bellamy and other formula makers have surged since late 2015, with local media reporting Chinese visitors snapping up the product in Australia to re-sell at a huge mark-up back home, where food safety scandals are rife. has resulted in hefty price-to-earnings (PE) ratios for these companies, meaning they must report rapid earnings growth to justify their valuations.
"That's the trouble with highly priced stocks: it's a bit overhyped," said Bill Keenan, general manager of equities at Lonsec Stockbroking.
Bellamy's PE is 143, ten times the 14.8 average of listed Australian firms, while Bega Cheese Ltd BGA.AX and vitamin maker Blackmores Ltd BKL.AX , which are jointly exporting formula to China, have ratios of 73 and 66 respectively.
Shares in Bellamy's fell 14 percent on Friday - the steepest drop since it listed in August 2014, even after it posted a A$13.7 million ($9.7 million) net profit for the six months to Dec. 31, four times its A$3.2 million result the previous year.
The company which began as a family-run business from the small island state of Tasmania listed at A$1.00 and ended 2015 at A$16.50.
Adding to the unease about Australian milk powder exporters exposed to China are signs that demand is waning: total milk powder imports fell 40.7 percent in 2015, while average prices also fell, according to Dairy Association of China figures.
Bellamy's, however, said it was building up its production capacity and online shopfront to increase its exposure to China.
"We continue to monitor market demand dynamics, in particular the purchase of Bellamy's products from Australian stores and customers then on-selling those products through independent e-commerce platforms overseas," Chief Executive Officer Laura McBain said in a statement.
"We have put in place a strategy to address this through our online flagship stores (and have) seen substantial growth in sales direct from Bellamy's to consumers in China."
Many Chinese buy products from Bellamy's and other foreign firms to re-sell on e-commerce sites run by companies such as JD.com Inc JD.O and Alibaba (N:BABA) Group Holding. BABA.N
($1 = 1.4079 Australian dollars)